09/12/2015 BBC Business Live


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This is Business Live from BBC News with Ben Thompson and Aaron


T-changing the rules for content access in Europe. Hey, could this be


the end for geo-blocking? Live from London, that's our top


story on Wednesday 9th December. Watch what you what,


wherever you are. The EU considers proposals that


could end geo-blocking in Europe. But media firms fear a loss


of revenue and big copyright bills. Commodity prices fall further


with oil below $40 and iron ore The markets were hammered yesterday


with the fall in commodity prices. The mining index was at a ten year


low. That's what they're doing now. We will discuss why.


Or would you be happy with a bottle of British bubbly?


We'll be getting the inside track on the English wine industry


when we speak to the CEO of the country's leading vineyard


As the cost of a traditional British Christmas dinner falls


to a four-year low with cheaper turkey, pork and potato prices.


We want to know what you're stocking up on?


So whereever you are in the world, tell us you're preferred


Technology may mean that we can carry around entire music and video


collections in our pockets on smartphones or tablets,


but it doesn't mean you can watch them everywhere.


When you travel abroad, suddenly you can't get access


But it's all down to copyright and what's known as geo-blocking,


granting access according to where you're geographically located.


It's what firms like Netflix, Hulu and YouTube use to make


sure their content is only broadcast where it has been licensed


Now the European Commission wants to stop it across the EU.


If the proposal gets approval, anything available in one member


country would also be available in all others.


As you might expect, the media content industry is dead


against the proposals fearing that it could cost them a fortune


Raould Lumb is an Associate at Hill Hofstetter.


It is always good to have you with us. The media industry, many parts


of it are not happy with this. I'm getting it clear, the reason is and


correct me if I'm wrong, they licence the content in each country


and they make money in each country, right?


Yes, absolutely. When the measure anti-geo-blocking was announced


there was outrage from the audio visual content industry who said you


are going to divide the value of our product by 28. There has been a lot


of lobbying by them and we are expecting more limited crackdown on


some geo-blocking practises today. When we talk about this, we talk


about all content, the BBCi player for example, right? Could be. What


we are expecting today is something to increase the portability of media


rather than to end geo-blocking altogether. The European Union will


be giving us a draft regulation which says we are a consumer buys a


product in country A, they will have the ability to watch that in country


B, C and D, no matter where they move through the European Union.


Ben, you want to come into this. Can I ask you this, I want to make this


clear, the BBC, Netflix, they make their own content, but the majority


buy in their content. What does this mean for the original content


provider? It might not be the BBC's fault or Netflix? The content


provider has a monopoly over their IP and their product. They want to


sell that. What will have to happen in order to end geoblocking is to


undermine those local monopolies and to allow people to carry their


rights from one local monopoly into another. It is a rare situation


which the law might be more complex than the technology. You imagine if


you've paid for access to a site, be it a BBC licence fee or whatever it


is you paid for, you would expect to be able to take that with you. There


are so many other industries you can do that, if you buy something and it


is portable, you can do with it what you want. You have paid for this


service already, why not be able to access it elsewhere? It seems very


old-fashioned and it is the law holding back business practises, but


the technical reason you can't is because the person you've said to


distribute the content to you, be it Netflix or the BBCi player, that


person has only got a right to distribute it to consumers in one


country. When you move boundaries, even though you are accessing the


internet they have got the technical ability to distribute it to you,


they don't own the rights to beam that content to where you happen to


be standing on the globe. Interesting. We could talk a lot


more about this. Time is against us. Thank you very much.


Some of the stories making headlines around the world.


Dow Chemical and DuPont are reportedly in talks


The combined company would have an estimated market value


of $120 billion and employ over 100,000 people around the world.


It's thought that if the deal goes ahead, the two companies would merge


as equals with both chief executives retaining their jobs.


One of the world's most famous gun-makers, Smith Wesson,


has nearly tripled its profits in three months to October compared


The firm said net income came in at $14.2 million,


Some analysts have said the surge in gun sales across the US is due


to worries over restrictions on gun ownership


particularly in the wake of mass shooting incidents in the country.


Shares in Yahoo have jumped more than 2% after reports it will not


sell off its $32 billion stake in Chinese e-commerce group Alibaba.


It follows pressure from investors worried about a potentially huge tax


Yahoo is now looking at spinning off its core business instead.


At this time we will look at the Business Live page. A story talking


about the ongoing debate over the UK or Britain's continued membership of


the EU. A story here, one of London's biggest firm, ICAP saying


that the UK could thrive outside the EU. He has not made up his mind


whether the UK should leave the EU. A further update on the falling oil


price we have been talking about and we will discuss more about the


falling oil price during the programme, but whilst it is good


news and bad news depending on your prospective, if you are a producer


of oil, not great news. If you are an organisation or a Government


around the world... An importer. Not good news. Good news for drivers.


Good news for oil importers. Talking of that, let's stay with that story,


commodities in general. I want to talk about commodities and


in particular iron ore, the price kind of fallen off a cliff. Let's


get this straight, at the moment iron ore fell to a ten-year low, it


is now $39.60 a tonight, but that doesn't make sense. What does that


mean? It means, in 2011 it used to be nearly $200 a tonight, right?


Absolute lie, Aaron, it is a tipping point. It is causing mining stocks


to sink today. It is a huge come down from four years ago where it


peaked close to $200 a tonne. Of course, we have been reporting lots


about Anglo-American whose stocks have been sold off to a record low


and that's after the company said it would sell huge chunks of its


business as well reduce its workforce by nearly two-thirds and


of course, that's a company that competes with the likes of BHP


Billiton and Rio Tinto and I should add those stocks actually closed


mixed today on the Australian exchange. Rio Tinto down under 1%,


BHP gaining some. We know the news is that Rio Tinto hasn't been helped


by news that it is cutting spending plans too and it is joining its


peers in the mining sector in reducing all the costs in the face


of the sinking commodity prices that you speak of. We know the price of


iron ore has been falling due to China's weak trade performance,


which, of course, has reduced its demand for iron ore which, of


course, is used to make steel. Thank you very much.


Ver ray shoulds is a good word for a Wednesday morning. Mining stocks


slump to go a 11 year low. Copper, aluminium, platinum and iron and


energy prices. Investors and traders are talking about this being a


perfect storm of slowing Chinese demand and the resulting fall in


commodity price. Yesterday Anglo slashed up to 85,000 workers. Others


are likely to follow suit. So what has Europe done today? Well there,


is the current state of play in Europe. Back in positive territory,


but perhaps some profit taking after the falls yesterday, but it is


probably going to be a pretty volatile end to the year. We will


talk about that in a moment. Michelle has the


details in New York. The cost of drugs comes under the


microscope. Some have been under fire this year over rising drug


prices with doctors, patients and lawmakers complaining the Senate's


special committee on ageing is holding a hearing on the subject.


The story of lulu has been a rocky one to product recalls and to the


departure of its Chief Executive. It is likely to report profits for the


third quarter. Have commodity prices hit rock


bottom yet? That's the question oiling the US markets after a


volatile few sessions. Will investors shake off their worries


this Wednesday? Good on you, Michelle!


Bronwyn Curtis from The Society of Business Economists.


Let's start with commodities. We have been talking like you have


until we are blue in the face about what is going to happen next week


with the American Central Bank it is likely they will increase interest


rates. I'm curious what that does to this commodity price? It makes it


more expensive. We have been talking about this hike in rates from the


Federal Reserve for so long, it must be priced in. I actually think that


the dollar might fall if they hike. It is always by the rumour -- buy


the rumour, sell the factment we have got to be careful here about


saying they are going to do it. I know it is the first rate rise, if


they do it since 2006 and it is the first turn in the cycle -- term in


the cycle, but I'm not that concerned about it. I talked about


this being the perfect storm, we know China and the Chinese economy


is slowing and that's in large part responsible for the slumping inn


commodity prices, but the two coming together and given the volatility or


the unpredictability about US rates and eurozone action, all this


uncertainty, markets are heating right now, aren't they? They are and


they are nervous. We have not been here before in terms of a rate hike


from the US after quantitative easing and so on, the ECB didn't do


quite enough, China is slowing and when we talk about a super cycle in


commodities, I can remember dare I say the last up cycle in commodities


and always, super cycle upside and a long way down because it is a super


cycle and as all the companies have raised a lot of debt, they are in


trouble and that's going to be the problem and I think other companies


will follow Anglo. Interesting stuff. Wow. Not good


stuff. Not good stuff for the Australian company, but we don't


have time to talk about that. You're going to come back and we're going


to talk about the papers. Still to come: We'll be getting


the inside track on the English Wine industry when we speak to the boss


of the country's leading vineyard You're with Business


Live from BBC News. Let's get more on that


commodity price bust. The FTSE 350 mining index touched


a ten year low yesterday so what does


it mean for us? Simon Jack is in our


Business Newsroom and if nothing else, Simon, no Santa


rally this year? PROBLEM WITH


SOUND Well, we would love to hear from Simon. Can you lip read,


anybody We can get subtitles put along the bottom!


The big slump in commodity prices is taking its toll. We have discussed


already the issues related to the import and export and what it means


for inflation. Inflation here in the UK at a pretty low level. Struggling


to get above 0%. That's one affect. We've plug him in! OK. Sorry about


that! Can you hear me now? Yes. Spare a thought for the North Sea,


65,000 jobs gone there and in the supply chain, 5,000 jobs gone in the


steel industry and jobs in Asset Management as Saudis pull funds and


BHB bill tonne listed here. It might mean cheaper petrol, but there are


big knock on effects elsewhere in the economy and we are feeling that


at the moment. Simon, good stuff, thank you very much. Simon Jack


there in our business newsroom. Is it possible to go from


commodities to Christmas dinners? It is a commodity, food is a commodity.


The cost of Christmas dinner is at its cheapest level since 2011. All


of this is rated to the fact that all of the commodities that make up


Christmas dinner are at record lows. Meat, potatoes. Not those things, I


cannot stand them. Brussels sprouts, they are down as well. We have been


asking you, what is Christmas dinner for you? James, good on you, with


competitive prices on luxury finger food, that is what I am looking at,


he says. I love that of finger food! It is great, love it! I have ordered


a takeaway for my family Christmas dinner, my local Indian. This one.


Just for people like me, she says. You are watching business life, the


new rules to ban deer blocking across the European Union, that is


where you can stream media in one country but you cannot do it


elsewhere. -- geoblocking. Good news if you are consuming, not if you're


a media provider. It was not even there in the script.


Now, if you're buying in the booze ahead of the festive season,


Perhaps not your first choice, but it's slowly and steadily gaining


a loyal following around the world, and beats many top French champagnes


Chapel Down is England's leading vineyard and has produced


Under the leadership of Frazer Thompson, Chapel Wines has


become the largest profitable wine company in the UK,


driving demand for English wines in places as far afield


This has driven sales up by 33% year on year, to $4.9m.


And last year, the firm completed a crowd funding campaign,


raising $6m and attracting over 1,400 new shareholders.


Welcome to the programme. I am just going to make an excuse for Aaron! I


will be very careful! We have talked about this on our shows, this


explosion in English wine, sparkling wine, why, over the last few years,


all of a sudden... ? There has been an explosion in sparkling Rhine, per


second, we have all got little moments to separate. Mini fist bump


moments, what is a good way to celebrate? We think champagne has


moved on, something that can make any occasion special. That is hardly


the right glass! I am so sorry! This is a perfect product to celebrate,


it is great and different and original. What makes English wine


different? What is it about an English great, and English vintage,


that makes it so different from the French champagne that we have known


and loved? The first thing is the similarity to the land it is grown


on. The first thing you see in England is the white cliffs of


Dover, the chalk, that gives a great sparkling wine. That gives it a


great acidic and mineral content. We have got the land and the know-how,


we consume a lot of champagne in this country. We are, how Ray! The


biggest consumers of champagne outside France. We love champagne


and we love sparkling wine, it is -- sparkling wine, it is clean and


refreshing and it is for a seller brochure. That is not just me saying


it, it is international juries. What is the market? Is it baby steps in


getting that mentality right? Baby steps is right. You have got to move


very slowly. And we are the biggest country in the water champagne.


That's regretting the world. Get it right in the UK and then start


exporting, Japan, China and Hong Kong, who are starting to get


interested. You have had passed in big business and then you joined


Chapel Down, and you have got a great story about a photocopier? I


used to be a brand director for Heineken, I was sent to a lot of


places, they teach you cash is king, but they do not tell you what


happens when the cash runs out. When I joined Chapel Down, four days


later, they came to repossess the photocopier. That is the consequence


of cash flow! From that perceived failure, they repossess the


photocopier, how do you start to build the business up again, get the


cash coming in, get the sales through? You talk about


crowdfunding, that is a great way of getting cash, but also customers.


Absolutely right, you have got to do business on a sound footing, wine is


a cash generating business, but beer is not. For example. The first round


of grant funding, we had 1400 new investors who were as passionate


about what we were doing as I was. It is like having mini mes on Biddy


tables all around the country -- the dinner tables around the country


boring people about how good English wine is. Beer is now a hugely


interesting market at the moment, craft beer is booming for the very


reason that we have seen this enormous merger going on, 30% of the


world in one company, and we are seeing passion and taste coming


through in smaller craft beers. We are in that market as well. We do


have to run it up, time is short on the programme. Royal wedding...?


Allegedly! Allegedly this was consumed by the guests at the Royal


wedding. Allegedly, allegedly! Cheers to that. It was a pleasure to


have you here. Allegedly! We do not have this in our Coffey mucks every


morning! -- Coffey mucks. Speak for yourself! What you do if you have an


airport, three, in Malaysia. They have said, if you do not come and


collect your airline within 14 days, which have been abandoned at the


airport. A 747. Three of them! I knew I had parked it somewhere! You


might lose your phone or keys. These are old planes, these are 747 200,


but very fuel-efficient. -- not very fuel-efficient. It costs too much to


get rid of them. Now, can you have a sport


which involves no more effort The industry now refers


to video gaming as eSports, and there's serious


money to be made. It's widely accepted


as a paying occupation. It's not, like, you play


games for a living? It's actually just, wow,


you play games for a living. You can earn half a million dollars


per year just playing LoL. The top player in Korea


was offered $1 million in China But he refused, saying,


I want to represent Korea. Bronwyn Curtis from The Society


of Business Economists joins us. We have not had much more champagne


in that break, although we are struggling to get our words out. You


have had no booze! Let's talk about Yahoo, they are not going to sell


off the stake in Ali baba, just their core business. I thought it


was always going to do that. It was going to sell-off Ali baba at one


point. I think the interesting thing about this story is that it is the


Ali Baba that they want, people, they buy Yahoo to get into Ali Baba.


Core business being sold off is not such a big deal, they have the


biggest reach in the US but they have not managed to monetise it.


They are putting it up for sale. The rise bought AOL, 4.4 billion


dollars. -- Verizon bought AOL. Let's talk about the sharing


economy, this story talking about them burning through their cash


pile, this is the way the business is, they have got to spend money


upfront to get customers in before they get any revenue so they are all


making a revenue at -- loss at the moment but they need repeat


bookings. That is how they make cash. It takes time, you need


customers not just a comeback once but twice, ten times, 20 times, you


have to get the return custom. We have Uber, who raised $10 billion.


They are worth, apparently, $50 billion. You go down GM or Ford.


Bigger than Delta airlines which has more than 1000 aircraft. But losing


millions and millions every day. It is the same with AirB They


expected to make a loss of 150 million this year. It is getting the


return custom is getting the brand going. Thank you very much. We will


see you soon. Cheers!


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