:00:00. > :00:08.This is Business live from BBC News with Rachel Horne and Ben Bland.
:00:09. > :00:12.The streaming giant Netflix wows markets as it surges past
:00:13. > :00:33.Live from London, that's our top story on Tuesday, 18th July.
:00:34. > :00:36.Shares in Netflix surge during after hour trade -
:00:37. > :00:38.as it beats expectations - boosting its revenues.
:00:39. > :00:44.Renegotiating trade in North America - the US says better access
:00:45. > :00:46.and reducing its trade deficit is at the top of its priorities
:00:47. > :01:01.all eye to the UK and inflation figures due out in a few hours time.
:01:02. > :01:05.Can artificial intelligence give you the edge in sports betting?
:01:06. > :01:08.We'll meet the man who claims his algorithms are going to turn
:01:09. > :01:10.the industry on its head. Today we want to know how
:01:11. > :01:31.The video streaming giant surprised investors overnight
:01:32. > :01:34.The company added 5.2 million subscribers in the past three
:01:35. > :01:41.months, boosting its global customer base to 104 million.
:01:42. > :01:44.It's a company whose growth reflects the changing culture of TV viewing
:01:45. > :01:50.Since its transformation from a DVD rental service to video
:01:51. > :01:53.streaming ten years ago, the firm's share price has
:01:54. > :01:58.rocketed - from just over $3 to more than $160 a share.
:01:59. > :02:02.And Netflix is splashing the cash - this year it will spend $6bn
:02:03. > :02:06.on content - that's 25% more than its rival Amazon
:02:07. > :02:11.It's all in an effort to lure viewers away
:02:12. > :02:18.Netflix has been aggressively expanding abroad -
:02:19. > :02:20.and says it is now in more than 190 countries.
:02:21. > :02:25.But with one notable exception - China.
:02:26. > :02:28.In April the firm agreed a deal to licence its content to one
:02:29. > :02:31.of China's biggest streaming sites - which is controlled by Baidu.
:02:32. > :02:33.Jon Porter is the Home Entertainment Editor at Tech Radar.
:02:34. > :02:40.Business Live. Welcome to Business Live. So, when
:02:41. > :02:43.there is so many competing demands for time, what is it that Netflix is
:02:44. > :02:47.doing that is pulling people in, that is helping it do so well. It
:02:48. > :02:55.has been concentrating on its original content. It has put out a
:02:56. > :02:59.lot of critically acclaimed shows, like House of Cards, Stranger Things
:03:00. > :03:04.all very popular, that is with these exclusives Netflix is prove you to
:03:05. > :03:08.subscribe to them if you want the original programming. I suppose they
:03:09. > :03:15.have taken gambles of productions that otherwise may not have been
:03:16. > :03:19.made. No, that is true, I mean, and interestingly the CEO says they
:03:20. > :03:24.haven't been cancelling enough show, he says they are not taking as many
:03:25. > :03:27.risk as they would like them to. It is a data driven company, that I
:03:28. > :03:31.know what people are interested in and what they want to watch. The
:03:32. > :03:36.shows are calculated on Netflix's part. We mentioned that Netflix is
:03:37. > :03:41.more than 190 countries which is an achievement as the UN says, there is
:03:42. > :03:47.only 195 in the world. One country they will be really focussed on is
:03:48. > :03:52.China, we mentioned that tie up with Baidu. How significant is that to
:03:53. > :03:57.feature growth China is every market they want to get into, it is a hard
:03:58. > :04:01.nut to crack. Netflix is already licensed House of Cards through a
:04:02. > :04:05.local provider, but it has been pulled because of censorship
:04:06. > :04:10.concern, so, China is a important market to get right but difficult to
:04:11. > :04:13.get right. And big competitors like Disney are having trouble get into
:04:14. > :04:18.the market. What about the relationship with its competitor,
:04:19. > :04:24.there is an uneasy relationship with Hollywood but it is facing
:04:25. > :04:30.competition from Amazon Prime. That is right. The uneasy relationship
:04:31. > :04:35.with the traditional movie industry has been well documented, Netflix of
:04:36. > :04:40.course doesn't allow cinemas to release movies that eare Netflix
:04:41. > :04:45.produced. It likes to keep everything contained on its service,
:04:46. > :04:50.that contrasts with Amazon Prime, they like to get cinemas exclusivity
:04:51. > :04:55.and then release it on their serve, in terms of the Netflix versus
:04:56. > :05:03.Amazon, it seems as though Amazon is pouring a lot of money into origin
:05:04. > :05:07.content, they have done very well, but the amount of content on Amazon
:05:08. > :05:10.isn't as enough as Netflix. Netflix outspending Amazon in that regard.
:05:11. > :05:14.Thank you very much. Let's take a look at some of
:05:15. > :05:17.the other stories making the news. The US government says that
:05:18. > :05:19.improving its trade balance will be its top priority
:05:20. > :05:21.as the Trump administration prepares to renegotiate
:05:22. > :05:23.the North American Free Trade The US President has previously
:05:24. > :05:27.described Nafta as a "disaster" and officials are due to meet
:05:28. > :05:29.with their counterparts from Canada BNP Paribas has been
:05:30. > :05:40.fined $246 million by It's the latest bank to be punished
:05:41. > :05:44.over traders who allegedly shared information about currency bids
:05:45. > :05:45.without adequate oversight BNP Paribas says it deeply
:05:46. > :05:50.regrets the misconduct - which was a clear breach
:05:51. > :05:52.of its own standards. The electric car company Tesla has
:05:53. > :05:55.added two independent directors to its board,
:05:56. > :05:57.including the boss of 21st The move comes amid criticism
:05:58. > :06:03.by some shareholders of a lack Some investors believe that too
:06:04. > :06:09.many of the company's board members have personal or professional ties
:06:10. > :06:14.to boss Elon Musk. Citigroup has chosen
:06:15. > :06:15.Frankfurt in Germany as it's new European trading hub,
:06:16. > :06:18.in part of its preparations According to various sources,
:06:19. > :06:24.the US bank will present the choice to its board of directors this
:06:25. > :06:43.week for approval. Plenty more stories online. Harry
:06:44. > :06:49.Potter still coining it for Bloomsbury. Another wizard quarter.
:06:50. > :06:56.Total revenues for the three months to the end of May were up 19% year
:06:57. > :07:01.on year. Have you read them? Well, how can I admit that without... I'm
:07:02. > :07:05.second time round. I have read them all and I'm now, I am about to start
:07:06. > :07:09.number four. They are yet to be discovered for me. Indian tax
:07:10. > :07:14.reforms have pushed up the price of cigarettes and hit the share price
:07:15. > :07:15.of tobacco companies. Lisa is in Singapore. What can you tell us
:07:16. > :07:29.about this. India raised the rate on July 1st.
:07:30. > :07:34.It was the largest tax overhaul since independence. Big companies
:07:35. > :07:39.thought they escaped the tax. The Indian Government have done a big
:07:40. > :07:44.u-turn and increasing prices by as much as 10% or about $12 per
:07:45. > :07:52.thousand stick, the market reaction to this has been swift, ITC, the
:07:53. > :07:58.biggest cigarette producer in India, has seen shares tumble by as much as
:07:59. > :08:04.15% in Mumbai. That is its biggest drop in 25 year, a small rival
:08:05. > :08:09.called Godfrey Phillips fell by as much as 10%. Last year, these
:08:10. > :08:13.companies also clashed with the Government, after they were ordered
:08:14. > :08:17.to increase the size of the health warnings, so they were ordered to
:08:18. > :08:22.change it from 20%, to 85%, and India is a major market for them, it
:08:23. > :08:23.is a $10 billion market so any change is going to be felt really
:08:24. > :08:31.keenly. Yesterday, we saw a two year
:08:32. > :08:36.high for Asian shares. The Nikkei open again today
:08:37. > :08:38.after a public holiday yesterday - remember those solid growth figures
:08:39. > :08:42.out from China - economy growing at a faster-than-expected 6.9%
:08:43. > :08:47.in the second quarter - that's created a steady
:08:48. > :08:54.trading base for Asia. The dollar was down as the passage
:08:55. > :08:57.of US health care bill seems ever more problematic and investors feel
:08:58. > :09:01.that the Fed is becoming more cautious raising interest rates -
:09:02. > :09:04.now thought to be less than a 50% In Europe - all eyes on the UK
:09:05. > :09:12.when the government will release inflation figures for June -
:09:13. > :09:15.remember it was 2.9% for May Investors will be keen to see
:09:16. > :09:24.could another increase prompt an interest rate rise
:09:25. > :09:26.from the Bank of England. And Michelle has the details about
:09:27. > :09:33.what's ahead on Wall Street Today. Now, this Tuesday investors
:09:34. > :09:37.will learn more about the health as the US economy as a mix
:09:38. > :09:41.of firms publish profits. Two giants of the financial services
:09:42. > :09:43.industry, Bank of America and Goldman Sachs report second
:09:44. > :09:45.quarter earnings with One firm expected to see a drop
:09:46. > :09:54.in revenue is the tech giant IBM. Analysts are worried about increased
:09:55. > :09:59.competition in the artificial intelligence space, and given
:10:00. > :10:03.the Trump administration's desire to increase defence spending,
:10:04. > :10:05.how will this benefit Lockheed The maker of F-35 fighter jets
:10:06. > :10:09.is likely to report higher revenue Joining us is Kathleen Brooks,
:10:10. > :10:23.research director for City Index. Welcome to Business Live. Nice to
:10:24. > :10:27.see you. Thank you. All eyes on the UK inflation, the latest figures.
:10:28. > :10:31.Yes, these are the figures for June, what is interesting, actually, is
:10:32. > :10:34.over the next six months we could see a slight shift in inflation,
:10:35. > :10:38.with pressures starting to dwindle a bit. That is largely because the
:10:39. > :10:42.inflation that has built up over the last six months has mainly come from
:10:43. > :10:46.the drop in sterling last year of the Brexit vote. That was a year
:10:47. > :10:49.ago, that starts to slip out of the index because it is year on year so
:10:50. > :10:54.we could see inflation start to fall. That may not be a bad thing
:10:55. > :11:00.for sterling because it will reduce the squeeze on the consumer one
:11:01. > :11:03.would hope. The weaker sterling and, has benefitted the FTSE 100 over the
:11:04. > :11:08.past year, since the Brexit vote. Of course, you know, has the
:11:09. > :11:13.strengthens we may see the markets cool off a bit do you think? We have
:11:14. > :11:17.that correlation with pound goes up the FTSE falls. It is not as strong
:11:18. > :11:21.it was, it tends to need big currency moves to do that. If it
:11:22. > :11:28.gives rise to consumer power, it should be good news for the FTSE 250
:11:29. > :11:33.which has more UK-based company, the FTSE 100 is impacted by so many
:11:34. > :11:38.global thing, no commodity prices because of the Myners and energy
:11:39. > :11:42.company, the smaller UK index could benefit if we see inflation fall,
:11:43. > :11:46.that, maybe not in month but in a couple of months going forward, this
:11:47. > :11:51.month we don't expect inflation to rise, that is the first time it
:11:52. > :11:58.stays still since March. Do you subscribe to Netflix? Do. I think I
:11:59. > :12:03.am not it will only person who doesn't, in the whole world. How do
:12:04. > :12:06.their financials work, we heard figures out today, they have more
:12:07. > :12:10.than 100 million people who subscribe to pay to watch it, what
:12:11. > :12:14.about their numbers? There is a few things that investors look for, kind
:12:15. > :12:20.of revenue stream is one thing but the subscribers is critical. What
:12:21. > :12:23.that have liked from last night earnings has been international
:12:24. > :12:28.subscriber and they think as a whole it is going to benefit profits and
:12:29. > :12:34.that is first time ever. If you think how long Netflix has been
:12:35. > :12:37.going, it hasn't benefitted because there haven't been enough
:12:38. > :12:40.international subscriber, if they you think only have 104 million
:12:41. > :12:43.there is billions available to them because they are in so many country,
:12:44. > :12:49.that could be a massive growth area, that is positive. A slow burner. You
:12:50. > :12:50.will be back to do The Papers with us.
:12:51. > :12:55.Can artificial intelligence give you the edge in sports betting?
:12:56. > :12:58.We'll meet the man who claims his algorithms are going to turn
:12:59. > :13:07.You're with Business live from BBC News.
:13:08. > :13:13.Royal Mail's latest trading update says we're sending less of them
:13:14. > :13:16.But it's better news in the parcel business -
:13:17. > :13:23.Theo Leggett has been going through the numbers.
:13:24. > :13:30.A bit of a mixed post bag? Oh dear, yes. It is a mixed bag, and it is
:13:31. > :13:34.for all the reasons that we are only too well aware of. People don't to
:13:35. > :13:39.send letters to one another any more, younger people don't. They
:13:40. > :13:42.prefer e-mail or social media, keeping in touch that way, so, the
:13:43. > :13:46.letters business is suffering. It is falling every year at the moment,
:13:47. > :13:52.over the past, in the first quarter compared to last year they were down
:13:53. > :13:55.6%. Revenues only down 4% because there was a lot of money spent on
:13:56. > :14:00.mailings linked to the general election. But the parcels business
:14:01. > :14:04.is doing very well indeed. That as you said is because or partly
:14:05. > :14:10.because a lot of people are shopping online and all the par shells --
:14:11. > :14:17.parcels needs to be delivered. So a mixed bag. Any plan update on the
:14:18. > :14:21.pension scheme? Royal Mail said it would be closing its existing
:14:22. > :14:25.pension scheme to new joiners from March next year. In place of that it
:14:26. > :14:29.is going to bring in a defined contribution and defined benefit
:14:30. > :14:32.scheme, so two schemes and it says it has discussed these with the
:14:33. > :14:37.unions and the union it works with is convinced this is probably the
:14:38. > :14:40.best deal it will get. The best way for warned will ballot members later
:14:41. > :14:47.in the year. All right, love that report. Signed sealed is and
:14:48. > :14:57.delivered by Theo. Can we stop! Return to sender.
:14:58. > :15:05.New Jane Austen ?2 coin being launched on this day in 1817 is when
:15:06. > :15:10.she died. 200 years on the Royal Mint tweeting they honour her life
:15:11. > :15:13.and works with a special UK ?2 coin. Also you can see up a the updates on
:15:14. > :15:22.the markets. The FTSE opening lower as Rachel
:15:23. > :15:28.mentioned. One that we will be touching on in the newspapers later,
:15:29. > :15:34.in the UK, the advertising standards agency wanting to stop harmful
:15:35. > :15:37.adverts including one that perpetuates gender stereotypes. All
:15:38. > :15:47.of that you can read more on on the website.
:15:48. > :15:49.You're watching Business live. Our top story:
:15:50. > :15:52.Shares in the streaming giant Netflix have surged
:15:53. > :15:55.in after hours trading after the firm said it now has
:15:56. > :16:00.The figure was much higher than had been expected
:16:01. > :16:03.and helped to boost its revenues over the past three months.
:16:04. > :16:07.A quick look at how markets are faring.
:16:08. > :16:14.All of them beginning the trading day slightly down. Here in the UK
:16:15. > :16:19.all eyes will be on the latest inflation figures. We get those
:16:20. > :16:22.later this morning on average prices and we will keep across the markets
:16:23. > :16:25.and bring you updates as we get them.
:16:26. > :16:28.Many of us will have the occasional bet on the outcome of a football
:16:29. > :16:33.But how would you feel about using artificial Intelligence
:16:34. > :16:37.Well, our next guest reckons his company is set
:16:38. > :16:41.to revolutionise the sports betting industry and put you
:16:42. > :16:43.firmly in control and AI is at the heart of it all.
:16:44. > :16:46.Charles McGarraugh was a partner in charge of metals trading
:16:47. > :16:48.at Goldman Sachs before he left to found his sports
:16:49. > :16:51.Stratagem says it uses a combination of data scientists,
:16:52. > :16:54.social media feeds and football scouts to help predict the outcome
:16:55. > :16:58.The company is looking to launch a hedge fund which would use
:16:59. > :17:01.the Stratagem platform to bet on behalf of investors.
:17:02. > :17:04.This would only be the second hedge fund of its kind
:17:05. > :17:12.The first, Centaur, closed down in 2012 after only
:17:13. > :17:21.Charles McGarraugh, Chief Executive, Stratagem Technologies joins me now.
:17:22. > :17:27.Charles, so, firstly, how does it work? How do you make the
:17:28. > :17:32.predictions when and where a goal is going to be scored or a tennis match
:17:33. > :17:36.point is going to be won? Think of our core asset as like a giant pipe.
:17:37. > :17:40.At one end you have a big funnel that takes in data streams of all
:17:41. > :17:43.different kinds. So we have action data, which are the events that are
:17:44. > :17:47.happening in the games. And then you have market data or the prices that
:17:48. > :17:52.are moving around different sorts of wagers related to the action data
:17:53. > :18:00.and then you have all sorts of other data, some of which generate using
:18:01. > :18:03.our football scouts and we take sports journalism and social media.
:18:04. > :18:08.That's one end of the funnel. Through the pipe then, you take that
:18:09. > :18:14.data, you make it in a way that it can talk to each other and then you
:18:15. > :18:17.start to extract information using various machinery and techniques and
:18:18. > :18:24.modelling techniques and then at the end of the funnel out pops a zero or
:18:25. > :18:30.one or a sell or a buy. You want to launch a hedge fund to use the
:18:31. > :18:35.platform to bet on be-of investors. Some might say that's irresponsible.
:18:36. > :18:41.This is people's money or pension funds. This is just betting on the
:18:42. > :18:44.outcome of a football match? Yes, I think it's an interesting line of
:18:45. > :18:49.reason. We take a different view which is that sports lend themselves
:18:50. > :18:53.really well to process driven analysis. It is the same thing again
:18:54. > :18:56.and again or things that are quite related the it is a highly
:18:57. > :19:00.structured environment and there is a lot of data because the same thing
:19:01. > :19:05.happens again and again and unlike a stock or a treasury bond or a
:19:06. > :19:10.commodity where the price can move a lot and stay irrational for a long
:19:11. > :19:16.Time, a football match is 90 minutes. The short duration of the
:19:17. > :19:22.asset class lends itself very well to this analytic process and it is
:19:23. > :19:25.risky, but that's why risk management and thoughtful process
:19:26. > :19:30.around that is key. How did you get into it? Were you a big betting man
:19:31. > :19:37.yourself on sport? I have a passion for markets. So I'm, I traded lots
:19:38. > :19:43.of dimp markets over the -- different markets over a long career
:19:44. > :19:46.and to maorks sports are, it is like another risk that you can trade and
:19:47. > :19:53.risk manage around. So my friend actually founded the company a few
:19:54. > :20:06.years back and spent this time building infrastructure processes
:20:07. > :20:10.and he joined me to run and grow the business while he resources the
:20:11. > :20:15.business side. What makes you think that your company can be a something
:20:16. > :20:23.ses? I can't speak to what happened with the other company. I don't know
:20:24. > :20:27.them. I don't know their history. We can be successful because we have
:20:28. > :20:34.signal processing in the same way that any qan tative trading shop
:20:35. > :20:38.would any other business and hedge funds succeed spectacularly and fail
:20:39. > :20:41.smarly. I hope we are in the first bracket and not the second. What
:20:42. > :20:46.football team do you support? Personally, Arsenal. Oh well. Bad
:20:47. > :20:51.choice! Nice to see you. Thank you.
:20:52. > :20:54.In a moment we'll take a look through the business pages,
:20:55. > :20:57.but first here's a quick reminder of how to get in touch with us.
:20:58. > :21:00.The Business Live page is where you can stay
:21:01. > :21:02.ahead of all the day's breaking business news.
:21:03. > :21:04.We'll keep you up-to-date with all the latest details,
:21:05. > :21:06.with insight and analysis from the BBC's team of editors
:21:07. > :21:14.Get involved on the BBC business live web page: bbc.com/business,
:21:15. > :21:17.on Twitter @BBCBusiness and you can find us on Facebook
:21:18. > :21:25.Business Live on TV and online, whenever you need to know.
:21:26. > :21:27.What other business stories has the media been
:21:28. > :21:35.Kathleen Brooks joins us again to discuss.
:21:36. > :21:48.So, New York Times, we have got looking at the Nafta overhaul plan?
:21:49. > :21:54.The Trump administration unveiled a list of objectives it wants to get
:21:55. > :21:57.from the Nafta deal. What is worrying for us in the UK is that I
:21:58. > :22:02.think the thoughts about the objectives is they are quite
:22:03. > :22:07.protectionist. It is like the president really likes his barriers.
:22:08. > :22:11.He is really sending a clear signal that the US isn't going to run
:22:12. > :22:15.massive deficits. You are going to have to take our stuff and we will
:22:16. > :22:20.take less of your stuff. What is interesting, yes, OK the US has got
:22:21. > :22:29.a deficit with Mexico. But they have a surplus with Canada. Exactly. He
:22:30. > :22:35.does well out of it with Canada, but not as well as he would like to with
:22:36. > :22:39.Mexico? Well, this isn't just about Nafta, he is using that as a
:22:40. > :22:44.template for the rest of the world, probably as a direct link to China.
:22:45. > :22:49.It is very interesting at this stage to see how the US are negotiating
:22:50. > :22:52.the new trade deals because we want a trade deal with the US so it won't
:22:53. > :22:57.be a walk in the park and it doesn't necessarily mean that the US will
:22:58. > :23:00.take all of our exports, but this Nafta deal is a template for
:23:01. > :23:07.something broader. It is sending a clear message to the rest of the
:23:08. > :23:13.world, the US isn't going to be taking in products anymore. He is
:23:14. > :23:21.renegotiating and then etc' not. This is the Trump administration.
:23:22. > :23:32.The story in The Daily Telegraph in the UK. About to plans to pull the
:23:33. > :23:39.plug on adverts that per pet wet genderster owe types. A woman in a
:23:40. > :23:44.bikini and it was deemed to be sexist. How do you judge what is
:23:45. > :23:49.sexist? It is a complicated story. They don't want to propel the gender
:23:50. > :23:53.stereotypes, women cleaning up after their families or men being
:23:54. > :23:58.engineers, that type of thing. I guess, you could argue are they
:23:59. > :24:04.trying to change the world or late to the game? It is reflecting more
:24:05. > :24:07.of the real thing. If a man cleans table after breakfast, no one thinks
:24:08. > :24:11.anything of it. There is more splitting equally between household
:24:12. > :24:17.tasks and more women are going into traditional male roles. This is a
:24:18. > :24:27.reflection of reality as well as a need to stop. I was reading an
:24:28. > :24:33.article and it was a future scholar and a ghirl a butterfly dress and it
:24:34. > :24:38.was, "Qur future starts here." They withdrew it. A lot of adverts have
:24:39. > :24:41.been withdrawn because of that. These companies would be wise to
:24:42. > :24:46.take heed of this article because it could save them a lot of money in
:24:47. > :24:50.advertising down the road. It goes too show how important advertising
:24:51. > :24:57.is to our lives. It it is that's a long time coming, I think. Netflix
:24:58. > :25:01.is the top story. We were asking our viewers whether they watch streaming
:25:02. > :25:07.on demand or traditional telly. Loads of responses. Luke says, "I
:25:08. > :25:14.tend to watch TV as it is broadcast live. I use catch-up when I need
:25:15. > :25:19.to." Simon says, "I watch almost exclusively streamed TV. ." Mark
:25:20. > :25:26.says, "Either really. Generally recorded. A bit of on demand maybe.
:25:27. > :25:31." Lots and lots of tweets. Netflix have achieved the ultimate accolade,
:25:32. > :25:38.they have become a verb, Netflix and chill. That's what I'm going to do
:25:39. > :25:42.after this programme. Other subscribers are available. Kathleen,
:25:43. > :25:45.thank you very much for going through the stories with us. Thank
:25:46. > :25:46.you for the tweets. More business throughout the day. We will be back
:25:47. > :26:10.tomorrow. See you then. Bye-bye. Hello there. Good morning, we have
:26:11. > :26:13.got another warm and sunny day across many parts of the United
:26:14. > :26:18.Kingdom. But as the warmth starts to build up today there is the risk
:26:19. > :26:19.later on of