tv BBC Business Live BBC News April 3, 2018 8:30am-9:01am BST
this is business live from bbc news with ben thompson and samantha simmonds. listing to a different tune. music streaming giant spotify floats on the stock market. it might have changed the way we consume music but is still struggling to make money. live from london, that's our top story on tuesday 3rd april. (titles) spotify has taken the unusual step of listing directly on the new york stock exchange. this means less information for investors and a guarantee of a volatile first day of trading. but it could be bad timing for the streaming platform. us tech stocks like intel and amazon have taken a battering after the bank holiday weekend. and this is what the markets in
europe are doing in the first few minutes of trade. we will explain why they are following the lead set by asia and wall street. we meet the man eyeing a profit from glasses. the boss of cubitts will be here to tell us why it takes 50 processes to make a pair of spectacles — and why he's reviving a dying art. and as spotify prepares to float on the stock market, we want to know, has it changed the way you listen? despite revolutionising the music business, it's still struggling to make money. just use the hashtag #bbcbizlive. hello and welcome to business live. welcome to the programme. shares in the music streaming firm spotify will be publicly traded for the first time later, but the stock market debut isn't a conventional listing. the firm will list shares directly on the nyse so rather than issuing new shares, spotify‘s existing shareholders will take their stake directly to the market.
spotify launched its streaming service in 2008 and by the end of this year expects to have 208 million users. of those, just over 70 million are premium subscribers who pay for an ad—free service, but the company says that number should be close to 96 million by the end of 2018. and while spotify is expecting revenue to grow by as much as 30% this year, it's still forecasting a loss of up $290 million in 2018. with me is chris hayes, a media analyst at the research firm enders analysis. welcome to you, thank you very much for coming in. so, this direct this mean on a day when tech stock have taken a hit across—the—board, is it going to be a good idea? well, it is not exactly the ideal day but on the other hand, it is a direct listing
with no lock—up period, and they're not issuing new shares, so therefore they're not getting new financing for it. so, if today is not the ideal day for it then investors can choose to trade whenever they want, another day. why are they going to market now? because throughout. years of private financing rounds, they've made a series of promises to investors that they would go public sooner investors that they would go public sooner rather than later. so, this is really about just sooner rather than later. so, this is really aboutjust delivering on those promises. and december that it is going to lead to any changes in terms of how the company is run and what it offers to consumers? in the sense that very little is changing in terms of ownership, it is hard to see that there will be anything more than a see that there will be anything more thana marginal see that there will be anything more than a marginal difference in how the company is run. and as we were hearing it is still making a huge loss, and forecasting by the end of this year to carry on making a huge loss — when is it going to be able to turn that around, do you think? well, they have consistently been getting close and close to
profitability when you measure their losses relative to their user base oi’ revenues. losses relative to their user base or revenues. in actual fact, losses relative to their user base or revenues. in actualfact, based on their guidance and based on historic trends, i think an operating profit by 2019 is a very real prospect. what about any long—term strategy? are they at risk, because they're not particularly diversify, they offer one service and that is it? yeah, this is a real risk in the long—term for spotify. so far, they've done a very, very good job of warding off competition from the likes of apple music, amazon and google, but in the long—term, these tech giants who have an awful lot of resources at their disposal, as well as these product ecosystems which they are able to wield against spotify, could prove a real problem. and what about artists, because a lot have been complaining that only the biggest stars are actually making enough money from it? i think the real problem for artists is that with streaming, the royalty payments are
spread over the listening life of the song rather than being received allup the song rather than being received all up front at the moment of purchase. thank you for your analysis. and you have been sending in your comments about spotify. this one says, he tends to pay for it for and then takes a break. amazon prime is not as good a spotify the music, he says. i am not as good a spotify the music, he says. iam more not as good a spotify the music, he says. i am more than happy with apple music and radio, says this one. do you have an account?” apple music and radio, says this one. do you have an account? i do, actually. we have an account but we are the cheapskates! it is my kids that mainly listen to it, so they can listen to the adverts! and just a comment from you... he says the idea spotify is excellent but it has been poorly executed. keep your comments coming in. let's take a look at some of the other stories making the news.
rupert murdoch's 21st century fox has said it would sell off sky news to disney or ring—fence it to try to address regulatory concerns over its proposed acquisition of sky. fox wants to buy the 61% of sky it doesn't already own. but it faces regulatory problems after the competition and markets authority found the $16.5 billion deal was not in the public interest. shares of us chipmaker intel fell by more than 9%, on reports apple has developed its own chips for its computer range and will stop using intel products within the next two years. apple already makes its own processors for the iphone and ipad. electric car maker tesla also had a bad day. its shares slumped 5% as investors await production numbers for the closely watched model 3, a cheaper electric car that analysts see as crucial to the company's long—term profitability. (stab) we can show you what the numbers are doing at this point in the day, and
asian shares, a pretty mixed picture over worries of a trade war and concerns about tech firms that we touched on at the start. falls in asia were pretty modest and mixed compared to what we saw on wall street, where there was pretty wild trading in amazon shares and other tech stocks on wall street, which was sparked by yet more criticism of their business model, particularly in terms of costs, that came from president trump. this is what europe is doing, and it is playing catch—up with wall street. there's concern too that the us and china are on the brink of a trade war. on monday, china announced tariffs on 128 types of us goods, in response to trump's steel and aluminium tariffs official. more on that in a moment, but firstjoe has a look ahead to the day on wall street. 0n on tuesday, investors will again
focused on the impact of a potential trade war. china's announcement that it would place tariffs as high as 2596 it would place tariffs as high as 25% on some us goods in retaliation for tariffs on steel and aluminium sent stocks tumbling on monday. tech investors will also be keeping a close eye on amazon shares, which fell by more than 5% as the us president continued his twitter attack on the e—commerce giant. elsewhere, us car—makers report sales from march, firms including ford and general motors are expected to report an increase in sales compared to 2017, but market observers warn this rise is most likely covered by discounts and incentives offered by dealers rather than by growing demand for new cars. in fact most expect there to be a slowdown in car sales throughout the rest of 2018, as interest rates begin to rise. more on the markets now. joining us is alpesh patel, chief executive of praefinium partners. let's talk about impending fears of
a trade war with each china, retaliating as we knew they would — what is your analysis of the tariffs they are proposing on 128 us companies, could it have gone more? what is more interesting than that for us as an asset management company is that i think it is actually quite positive news, we now have the ability to buy us stocks a little bit cheaper than we could a week ago and we are still very bullish because of earnings on the us market. this is minuscule compared to the bilateral trade in any event. what is funny about this is that it is a bit like punching yourself in the face, first of all donald trump does that by making attacks on americans... and then the chinese impose a tax on americans as well! so, it is notjust hunching yourself in the face, it is like getting somebody else to do it at the same time as you're doing it yourself! so it gives us in the asset management industry a buying opportunity. we are looking to buy
more. amid all of that punching, will any of this actually happen? it strikes me that china has got to look like it is being tough, saying, we are going to impose these tariffs, but the reality will be exemptions and subclauses and things? i don't think they will do that with china. they were with canada and mexico and europe. we have been here before and it is a salutary lesson from both the great depression and george bush, it happened with him. basically each steel job costs happened with him. basically each steeljob costs about $100,000 in ta riffs steeljob costs about $100,000 in tariffs when this happened last time. when it happened in the great depression there was a bit of a falloff in global trade. this does not tend to work out very well for the people, other than being able to flag wave and say, we're saving jobs. it would have been a heck of a lot easierjust to give $100,000 to each steel worker. because of now, you're going to get the sausage makers lobbying and the winemakers, and other american industries
saying, what about us, we are blue—collar, we are in the red states, there's midterm elections coming along... so i think it will actually escalate. to continue the throwing punches theme, president trump has got it in for amazon? yeah, his throwing punches at the world's richest man again, yes. his as they don't pay enough tax and he says that they're very bad for the us postal service. actually they're not, the postal service was on its knees until amazon came along. very good news for our shareholders in amazon, minuscule shareholders, this will allow us to buy some or, which we we re will allow us to buy some or, which we were not looking at doing until this. and i think that is the way the global asset management industry will look at it. might not work next year, it might be overvalued by next year, it might be overvalued by next year, but for the moment we are more than happy that he has taken some froth off prices and made stocks cheaper for froth off prices and made stocks cheaperfor us, froth off prices and made stocks cheaper for us, thank you, froth off prices and made stocks cheaperfor us, thank you, donald trump, it is the only favour he has done to people in terms of taxes on
americans, cheaper american stocks the foreigners — i don't think that was his intention. well, if he's watching... ! was his intention. well, if he's watching. . .! he's always watching! still to come... making a spectacle. we meet the man eyeing a profit from glasses — with a revival in traditional techniques. you're with business live from bbc news. 21st century fox has offered two possible remedies which it believes would satisfy regulatory concerns over its attempts to buy the 61% stake in sky it does not currently own. the first being sky news is completely ring—fenced through a legal separation. and the second option being that sky news is sold to walt disney after fox buys sky, even if disney's takeover of fox falls through. for more on this we are now
joined by our business correspondent andrew walker. we've touched on the couple of options there but as i mentioned, it is really complicated, just explain what we know so far? well, first of all, 21st century fox is in the process of trying to acquire the approximately 60% of sky that it doesn't already own. and 21st century fox itself is proposing to sell off a number of its assets, including sky, once it has got full ownership of it, to walt disney. the acquisition by sky of those remaining shares has raised some concerns for the competition and markets authority in the uk because of concerns essentially about the murdoch family. the concern that they would have too much control
over the british journalism they would have too much control over the britishjournalism is essentially, because they already have control in a number of newspapers, notably the times, the sunday times, the son and the sun on sunday. so, the competition and markets authority offered a number of alternatives for dealing with this concern, one of which was to seemed to prohibit the purchase by zist seemed to prohibit the purchase by 21st century fox of the remaining shares in sky. 0f 21st century fox of the remaining shares in sky. of course, the proposals from the company don't include that option. but the other two options were, as reflected in the statement that we have had from zist the statement that we have had from 21st century fox this morning, either ring fencing, and they're also proposing incidentally an undertaking that the murdoch family members do not get involved in editorial decisions or selling the whole sky news operation off to disney. andrew, thank you. i know it is really complicated but you have made some sense of it for us! you're watching business live.
our top story — shares in the music streaming firm spotify will be publicly traded for the first time later, but the stock market debut isn't a conventional listing. the firm will list shares directly on the nyse so rather than issuing new shares, spotify‘s existing shareholders will take their stake directly to the market. it means we don't get to have as much insight into the firm as we would with a traditional flotation, we don't get to delve too much into the details. a quick look at how markets are faring... asian stocks taking a head last night. —— taking a hit. let's get the inside track on the market for eyewear. one study suggests it will be worth $180 billion in the next six years. that's being driven by higher living standards.
and our increasing exposure to electronic devices. staring at those screens is bad for oui’ staring at those screens is bad for our eyes. one man who's building a thriving business on this expanding market is tom broughton, founder of the spectacle maker cubitts. he established the company in london in 2012 — and employs a complex fifty stage production process. the company has since expanded to five shops and an online store — and has ambitions for global expansion. with me is tom broughton, founder of spectacle brand, cubitts. good to see you. you will take over the world. you have some of your glasses here, we will look at them ina glasses here, we will look at them in a moment, tummy for the inspiration came from. you for glasses from a young age but what i wa nt to glasses from a young age but what i want to go into this, go back to traditional techniques? want to go into this, go back to traditionaltechniques? cars want to go into this, go back to traditional techniques? cars tell me where the inspiration came from. i've worn glasses since i was a child, and anyone who does
recognises the emotional bond you have for your spectacles. it's the last thing you take that night, the first thing you grab in the morning, i've always had a very strong emotional bond with my spectacles, a couple of chance introduction is i discovered this incredible legacy that kicked off in london in 1730 which insured for two centuries. that is for glasses were first made. not farfrom here, that is for glasses were first made. not far from here, edward that is for glasses were first made. not farfrom here, edward scarlet and 1730 decided to put arms on the side of frames which kick—started this industry that was loosely tied to watchmaking and jewellery making. i have this love of the product and exposure to this amazing heritage andi exposure to this amazing heritage and i wanted to combine them. we talk about you going back to traditional techniques, talk about you going back to traditionaltechniques, explain talk about you going back to traditional techniques, explain how they are currently made and what is a traditional technique of what you do differently? it's predominantly handmade, we use machines but they are hand controlled, starting with a piece of raw material, acetate in
most cases, we love playing with different types of materials, turning them into spectacles you wear on your face. turning them into spectacles you wear on yourface. i was turning them into spectacles you wear on your face. i was a turning them into spectacles you wear on your face. i was a reason was tied in to watchmaking because it's fine work, the point of a pair of spectacles is holding a pair of lenses in front of your eyes, a fraction of a millimetre makes a difference. sorry to interrupt, can you pass me those? this is the thing you pass me those? this is the thing you are cutting them out of. you start with the original piece of plastic, perspex, it's not injection moulded like most glasses are. you make an injection moulded frame you essentially pull resin into it for as these, handmade acetate frames, you start with that, you go through 50 stages to turn that into something you can wear on your face. why do people want to come to you when you can go into any attention and have a choice of hundreds of friends, i am sure you did when kubot yours, i have my reading glasses, why are people going to come to you and go through a
ladarius green says of, i don't know if they're involved in the design, the intensive, just to get a pair of glasses? what we are trying to do, is change the thing that people are thinking about, not needing them as a medical device but wanting and enjoying them, the feelings that i remember when i was 20, i bought my first proper pair of handmade spectacles, so... we like to think it's not the boreas, every one of the stages, but may take a series of weeks and months... i am edging towards these, these are quite different, they are sunglasses, quite funky. not my traditional type a friend that i would go for and i can imagine there aren't a couple of deep that many people. were those for the rest of the show! kind of yellow, golden glow. it's about doing something differently, you should me appear earlier made from unconventional materials stop i can't see anything. these are made
of wool. yes. there is a particular type of sheep, the hardwick sheep, lack sheep have really tight ball... they suit you. i can see nothing! it's fine. basically the role is too curly essentially to be used in clothing production salutes discarded on a brilliant company in wales that turns that what is essentially fiberglas but they put the wool in a bend and use epoxy resin. just really, we are out of time, are these a lot more expensive than traditional glasses? they are about the same price. you can spend as much as you want but the entry—level point is very accessible. brilliant, we are going to play with your glasses a little more. they are such fun. great to see you. good luck with the dog. thank you. i had to put my glasses back on, i can see a thing, i have no idea what is happening next. yes, you do this. the world's richest
cricket competition — the indian premier league — will use a e—auction for the first time ever to sell its tv rights. can you see night? i can't yes, it's good. ——i can you see night? i can't yes, it's good. —— i can. the auction includes rights for both television and digital, and are expected to fetch more than previous closed auctions. let's speak to devina gupta for more on this. there's been an announcement here that the bilateral matches, the bidding will begin in 115 minutes. three companies short listed, sony, rupert murdoch's company and the last, reliance, india's biggest corporate giant. this country, credit is a religion, watched by millions of people, an average of 50 million viewers tuning in for this cricket matches that the indian team
plays in, big money, take advertised and that is where one expects the bid could go as high as $600 million, to give a perspective to the viewers, the indian premier league which is equated with the european premier league, the media rights happened last year, they were backed by star india for almost two and a half billion dollars, this is the first time a transparent electronic auction is being held and digital rights will be closely watched for all these matches because that is where the companies feel they could get new users and young users as well. thank you very much. we asked for your tweets at the start of the programme about whether spotify has changed the way you listen to music. lots of you sending in your messages and daniel says yes, listening to anything as meant i discovered hundreds of new artists. it's quite diplomatic, you can discover new things and streaming services. nicola says it's
just another tech gamble by investors hoping for a fast buck. whether or not people pay, which i don't and ben dolls, john says i tend to pay for a while, take a break, i have amazon prime. keep your thoughts coming in. what other business stories has the media been taking an interest in? alpesh patel is joining us again to discuss. gm scrapping their monthly reporting statistics, it would give us a better insight? you would think more information is good especially in terms of the business, a company as big as this, good levels of profit. in actualfact, big as this, good levels of profit. in actual fact, companies such as mind which invest in companies like this, the worry is that companies report to often, in the us if you list your report every quarter, this isa30 list your report every quarter, this is a 30 day reporting of sales, the uk report every six months, we think that leads to short termism and it
can that leads to short termism and it ca n ofte n that leads to short termism and it can often lead to unbearable pressures on management, tweaking figures, so hopefully this will allow a bit more long—term respect. a naturalfact, allow a bit more long—term respect. a natural fact, they allow a bit more long—term respect. a naturalfact, they are allow a bit more long—term respect. a natural fact, they are following from the likes of walmart who stopped doing this a decade ago, every 30 days ten days it used to be in the car industry. you would think more information is better but actually in economics and business, it often is not, they will have the internal figures. it often is not, they will have the internalfigures. takes it often is not, they will have the internal figures. takes the it often is not, they will have the internalfigures. takes the pressure offa internalfigures. takes the pressure off a little. yes and it allows them to plant more long—term and given what is happening with tariffs, gm may well need to take a breather from having a spotlight cast upon them and hopefully, hopefully, will make the share price a little less volatile. refute let's look at the guardian story, robot heads for north sea oil scheme, i was quite surprised to find this was a world first. it's rather exciting, i think what they mean by world first, the
level of robotics being used at the moment, obviously there will be some degree of robotics. 0il moment, obviously there will be some degree of robotics. oil and gas surprisingly according to the 0ecd, the 22nd at 110th industry likely to be automated, it's not one of the top ones, given we are talking about dangerous conditions, what is exciting is the austrian technology company total, in reddish sea water is, and people forget the uk is a world leader in robotics, it's not just the japanese, we are a world leader and it's good to see this link and accelerating. —— british sea link and accelerating. —— british sea waters. good to see you as ever. and thank you. thank you for your company today. full coverage about the markets on the bbc throughout the markets on the bbc throughout the day. goodbye for now. hello. something of a battle between
mild and cold air, the mild air will reign supreme mild and cold air, the mild air will reign supreme over mild and cold air, the mild air will reign supreme over the next few days, some snow in the forecast. sunshine and showers elsewhere. south—westerly winds across england and wales wishing the mild air across, notice the east and north—east winds, in scotland and northern ireland, still some snow in the forecast, mainly over the scottish highlands at lower levels its reign, further samsung heavy rainfora time its reign, further samsung heavy rain for a time across northern ireland, pushing northwards into northern england. eventually into southern scotland, behind this sunshine and showers. some of them could be heavy, even a rumble of thunder. easing later in the day, in the sunshine and bridges could reach 15 degrees in the south—east, compared to 11—5 in scotland, stein
cold through this evening and overnight, traditional mainly over higher ground, some of that coming to lower levels, later in the night persistent rain pushing northwards through wales, northern ireland, northern england, and southern scotland. we find that, clear spells and showers, low temperatures between 5—9 per england, wales, northern ireland, lawsuit are freezing across scotland. another coast art of the day here, whether snow replaced by rain pushing northwards later. some of that will be heavy, sunshine and heavy, frequent showers across much of northern ireland, england and wales, temperatures down tomorrow, 10—13. 3-11 temperatures down tomorrow, 10—13. 3—11 for scotland. area of low pressure falling away eastwards into the north sea on thursday, behind that, brief ridge of high pressure, settling things down. thursday at the moment am looking like one of the moment am looking like one of the best days, mainly dry, good spells of sunshine after what will bea spells of sunshine after what will be a chilly start. some more cloud arriving later through thursday
afternoon, temperatures on thursday 10-13d, afternoon, temperatures on thursday 10—13d, recovering a little across scotland, here it will be a better day. towards the end of the week, some mild are from the near continent, notice to the west another system fishing eastwards. temperature starting to climb, likely to be reined by the weekend. that's all from me. goodbye. hello it's tuesday, it's 9 o'clock, i'm victoria derbyshire, welcome to the programme. our top story today — a 17 year old woman has been shot dead on a street in tottenham in north london. it's thought to be the 117th murder in the city this year. also on the programme... "a very clear two fingered salute at mainstream britishjews" — reaction to labour leader jeremy corbyn's decision to attend an event by a fringejewish group who're critical of mainstream jewish organisations. jeremy is a lifelong anti—racist and i think it came as something of a shock to him to be described as being some kind of racist and of harbouring people with anti—semitic