:00:00. > :00:10.This is Business Live from BBC News with Ben Thompson and Sally Bundock.
:00:11. > :00:11.Embattled electronics giant Toshiba has finally
:00:12. > :00:13.reported its long-awaited earnings, but with losses mounting does
:00:14. > :00:39.Live from London, that's our top story on the 10th of August.
:00:40. > :00:47.Analysts warn the 140-year-old iconic Japanese firm is still facing
:00:48. > :00:52.serious challengers. We'll talk you through Toshiba's latest
:00:53. > :00:58.revelations. And Facebook versus YouTube. The social media giant goes
:00:59. > :01:11.all out to woo TV viewers. Markets in Europe are open and trading but
:01:12. > :01:16.very mixed. We are going to find out how one man used his skills
:01:17. > :01:22.combating insurgents in the army can now sell us all sorts of things
:01:23. > :01:27.including the FT. As Facebook launches a new video service, we
:01:28. > :01:29.want to know what would you watch on social networks? What TV shows would
:01:30. > :01:44.you watch? Let us know. Welcome to the programme. As usual
:01:45. > :01:52.it's action packed. Toshiba has reported
:01:53. > :01:54.its much-delayed earnings - finally reducing the risk it will be
:01:55. > :01:56.de-listed from the The embattled electronics firm
:01:57. > :02:00.posted a loss of $8.8 billion It follows an accounting scandal
:02:01. > :02:03.and massive writedowns. So, what's gone wrong
:02:04. > :02:09.for the 140-year-old Japanese giant? Two years ago an accounting scandal
:02:10. > :02:12.was revealed that led to the resignation of several
:02:13. > :02:17.members of the firm's senior The company was found to have
:02:18. > :02:25.inflated the previous seven years Problems came to a head again this
:02:26. > :02:31.year, when Toshiba's US nuclear unit, Westinghouse,
:02:32. > :02:37.was forced to file for bankruptcy protection after suffering
:02:38. > :02:42.a $13 billion cost overrun. It's proving pretty difficult
:02:43. > :02:48.to find a buyer for Westinghouse. In a desperate move,
:02:49. > :02:51.Toshiba has been forced to put up This is a major part of its business
:02:52. > :03:00.- making memory chips It's been valued
:03:01. > :03:08.at about $18 billion. This has taken its toll
:03:09. > :03:13.on the company's share price which has effectively halved,
:03:14. > :03:15.and in April Toshiba actually warned With me is Pelham Smithers,
:03:16. > :03:37.Managing Director of A lotto details about why we are
:03:38. > :03:40.where we are with Toshiba. But some relief I suppose today that they
:03:41. > :03:45.have finally posted the earnings. This is just one of their
:03:46. > :03:52.challenges. That's right. They faced separate problems. The first is
:03:53. > :03:56.whether there are accounts would be qualified by the accountants. The
:03:57. > :03:59.other question is an ongoing investigation by the Tokyo stock
:04:00. > :04:03.exchange into whether or not the company has been improving its
:04:04. > :04:07.internal controls. They've overcome the first hurdle, they've got the
:04:08. > :04:14.second to come. It doesn't mean their future is secure? It doesn't.
:04:15. > :04:18.Even if they manage to get the Tokyo stock exchange to agree their
:04:19. > :04:21.controls have improved, they still have the problem that they have a
:04:22. > :04:27.negative net worth, so they need to reverse that situation. The only way
:04:28. > :04:32.they have of doing that is to sell their memory business. We've seen
:04:33. > :04:35.the dithering about trying to sell that and who they might sell it to.
:04:36. > :04:40.Let's talk about Westinghouse, that's been the bone of contention
:04:41. > :04:47.for Toshiba and the source of the problems. Cost overruns, delays,
:04:48. > :04:51.talk us through it. It started off when they paid too much for it in
:04:52. > :04:55.the first place. They then became aggressive in bidding for nuclear
:04:56. > :05:00.contracts around the world. Having been aggressive they then got hit,
:05:01. > :05:05.first by the earthquake which caused construction costs to go up and
:05:06. > :05:09.greater safety requirements. It also meant several countries decided not
:05:10. > :05:13.to go ahead with plans limiting them to a handful of important projects.
:05:14. > :05:16.Those projects run into trouble because they used a new untested
:05:17. > :05:21.technology and guess what, production costs went through the
:05:22. > :05:24.roof. In some respects, putting out the figures they've put a barrier
:05:25. > :05:28.around that. We know the cost associated with it and they can
:05:29. > :05:35.hopefully move on. Again, the future of Toshiba isn't assured. They have
:05:36. > :05:38.ring fenced the cost overruns to date but that doesn't necessarily
:05:39. > :05:46.mean there won't be any more in the future. They have a big issue in the
:05:47. > :05:50.UK with Moorside and the cost of that going up. While they are
:05:51. > :05:56.negotiating that project that's fine, but imagine if the costs went
:05:57. > :06:00.up after they fixed it. Everyone is very excited about the sale of
:06:01. > :06:05.memory chips but that is incredibly cyclical business. Where will it be
:06:06. > :06:10.this time next year? It's fascinating and you realise how a
:06:11. > :06:11.giant like Toshiba can face such problems putting its future into
:06:12. > :06:14.question. Thank you. Let's take a look at some of
:06:15. > :06:17.the other stories making the news. The owner of Fox News and 21st
:06:18. > :06:20.Century Fox movie studio looks Fox said revenues were up 1.5%
:06:21. > :06:24.to $6.8 billion in the fourth quarter after ratings at its cable
:06:25. > :06:27.TV business improved and drew Toy brick maker Lego is to appoint
:06:28. > :06:36.its second boss this year. 61-year-old Brit Bali Padda has been
:06:37. > :06:39.pushed aside by the Danish company after just eight months in the hot
:06:40. > :06:42.seat to be replaced He said he was never expected to
:06:43. > :06:52.stay in the post long term. The new chief will be 51-year-old
:06:53. > :06:55.Niels B Christiansen. Zurich Insurance has posted a 21%
:06:56. > :06:57.rise in Q2 net earnings. The Swiss insurer set out
:06:58. > :07:00.a turnaround plan last year and its latest numbers suggest it's
:07:01. > :07:02.already reaping the rewards. Net profit for for the three
:07:03. > :07:05.months to the end of June climbed to $896 million,
:07:06. > :07:07.That beat the average analyst Facebook has announced plans
:07:08. > :07:17.for a new TV service - putting it head to head
:07:18. > :07:20.with services like YouTube and Netflix - but could this also
:07:21. > :07:41.help the social network crack Asia? What is Facebook actually doing now?
:07:42. > :07:45.The social media giant is hot on the heels of other companies, Netflix
:07:46. > :07:50.and YouTube, as well as traditional TV networks. It will first launch in
:07:51. > :07:57.the US but eventually friends from across the globe will be able to see
:07:58. > :08:00.a range of shows including a safari programme from National Geographic
:08:01. > :08:03.and professional sports like women's basketball. Users will also have a
:08:04. > :08:10.chance to connect with other friends and dedicated groups. They hinted
:08:11. > :08:14.last year something bigger was in the pipeline. It has been reported
:08:15. > :08:23.Facebook has signed deals with groups like Buzzfeed. It is expected
:08:24. > :08:26.to open up new revenue potential for Facebook and programme makers in
:08:27. > :08:31.Asia and around the world, that could mean you will have to sit
:08:32. > :08:35.through commercials in between the show and before the show begins.
:08:36. > :08:38.There you go. We know what that's like!
:08:39. > :08:44.Tell us what you think about that story. We are asking what you would
:08:45. > :08:46.be watching on Facebook but also what you think about that. Give us
:08:47. > :08:54.your thoughts. Now the markets. Flat for Japan.
:08:55. > :09:02.Toshiba is a story that has dominated the day. Elsewhere it big
:09:03. > :09:07.loss in Hong Kong. In Europe right now it's a fairly similar picture.
:09:08. > :09:11.Markets are in a funny place. It's the middle of August so many are
:09:12. > :09:16.away on holiday. Trading volumes are thin. We've also got this sabre
:09:17. > :09:21.rattling going on between the United States and North Korea which is
:09:22. > :09:27.causing everyone to put their money in safe places during what is often
:09:28. > :09:31.a volatile time. When things happen they tend to be really exaggerated.
:09:32. > :09:35.Let's have a look at the day ahead on Wall Street.
:09:36. > :09:37.Rising tensions between the US and North Korea gave the market
:09:38. > :09:41.Now, this follows a period of record highs for US stocks.
:09:42. > :09:43.Investors, though, will have more than geopolitics
:09:44. > :09:47.One question - is the retail sector ready for a comeback?
:09:48. > :09:51.Several big department stores, from Macy's to Nordstrom to Kohl's,
:09:52. > :09:53.all reports second-quarter results, and they're struggling
:09:54. > :09:55.with competition from online retailers, as well as discount
:09:56. > :10:02.shops, and that has led to less people going to the mall.
:10:03. > :10:05.Add to that the big picture, which has been weak -
:10:06. > :10:09.retail sales have fallen for two months of the second world,
:10:10. > :10:13.so expectations, it's fair to say, aren't high.
:10:14. > :10:17.On the tech front, Snap reports results.
:10:18. > :10:19.Since it went public, there have been concerns
:10:20. > :10:21.that it is not doing as well as rival Instagram,
:10:22. > :10:25.so expect investors to eye Snap's daily active user numbers for any
:10:26. > :10:32.Joining us is Maike Currie, investment director
:10:33. > :10:44.Nice to see you. Sally called it sabre rattling and it really has
:10:45. > :10:48.rattled markets, these tensions between North Korea and the US.
:10:49. > :10:55.Markets have been shaken out of the summer lull. We saw yesterday that
:10:56. > :11:01.move into safe haven assets. That has cooled down a bit today but
:11:02. > :11:05.there's still some nervousness. There is a question over whether we
:11:06. > :11:11.will see a correction or even a bigger market collapse. What are you
:11:12. > :11:16.saying about that at Fidelity? There is a real debate going on. There is
:11:17. > :11:20.still a lot of money in cash and fixed income and bonds. There's a
:11:21. > :11:25.lot of money on the sidelines. We really need to see that money moves
:11:26. > :11:29.into the market before we can talk about a correction. The painful
:11:30. > :11:34.thing is it's in these final stages where investors can actually make
:11:35. > :11:38.the best profits. As always, you can never call the end of the market.
:11:39. > :11:45.But a lot of them are a way, it's one of the quietest times of year
:11:46. > :11:51.right now. Is that the danger zone, is that the time when a lot can go
:11:52. > :11:55.on? Absolutely. We saw this two years ago in China. In the summer in
:11:56. > :12:00.August, when a wasp in trading going on and we had the tensions and
:12:01. > :12:03.worries about debt levels in China, it really rattled markets. We will
:12:04. > :12:09.see if the tensions between North Korea and the US has the same
:12:10. > :12:14.impact. Thank you. You'll be back later to talk about Lego.
:12:15. > :12:18.Still to come - using psyops to sell baby products.
:12:19. > :12:20.We speak to the man using military intelligence skills to run
:12:21. > :12:38.You're with Business Live from BBC News.
:12:39. > :12:43.We are in earnings mode in the UK still. We've had news from the
:12:44. > :12:45.Co-op. The Co-operative Bank has posted
:12:46. > :12:48.a ?135 million loss in its first earnings report since a rescue
:12:49. > :12:50.package ended plans But the bank continues
:12:51. > :12:53.to lose customers. Our business editor, Simon Jack,
:12:54. > :13:06.has been going through the numbers. Simon, loving the trainers! Talk us
:13:07. > :13:10.through the Co-op. I've just got off the train! The Co-op bank, is it
:13:11. > :13:17.turning the corner? Yes and no. It's still losing money. It is narrower
:13:18. > :13:22.than the loss they made last year. They've been spending a lot of money
:13:23. > :13:27.on trying to knock it into shape. It had a near death experience in 2013
:13:28. > :13:31.when it discovered a ?1.5 billion hole in its finances. That led some
:13:32. > :13:35.of its investors to pump in additional money. In February they
:13:36. > :13:40.said they aren't turning it around, they were putting it up for sale.
:13:41. > :13:45.They didn't get any buyers said the existing bondholders have agreed to
:13:46. > :13:50.sink ?700 million of extra capital into the bank. That will see the
:13:51. > :13:54.Co-op group, the ethical mutual group which used to own the Co-op
:13:55. > :14:00.bank, C at stake reduced from 20% down to nearly 0%. The question is
:14:01. > :14:06.is this still the same Co-op a lot of customers like with its ethical
:14:07. > :14:11.stance? We've seen some of that in customer numbers, 25,000 customers
:14:12. > :14:16.out of 1.4 million current account holders decided to close accounts.
:14:17. > :14:20.That's not a stampede but it is a trickle. I was listening to the
:14:21. > :14:24.management talking today and they are at pains to stress they will
:14:25. > :14:29.continue their ethical stance. It's the one thing that sets the Co-op
:14:30. > :14:33.apart. It may not be the Co-op we know and love but they say it will
:14:34. > :14:38.look and feel the same. We've got to hope now this uncertainty is over,
:14:39. > :14:42.they are going to get an infusion of new capital in September, that the
:14:43. > :14:47.bank will be safe and behave like it always has, and they will be able to
:14:48. > :14:50.hang on to customers. In total both got 4 million with either a council
:14:51. > :14:53.mortgages. You get the impression this story is going to run and run!
:14:54. > :15:03.He's got the right shoes on! You don't want to know what I am
:15:04. > :15:10.wearing under the desk! You know why I am standing today!
:15:11. > :15:11.News on the website that Blockbuster films have boosted cinema revenues
:15:12. > :15:16.by nearly 20%. You're watching Business Live,
:15:17. > :15:19.our top story - Japanese industrial giant Toshiba has met a deadline
:15:20. > :15:21.to report its long-awaited earnings results, which may
:15:22. > :15:35.save it from being delisted That is after a major accountancy
:15:36. > :15:38.scandal that was revealed two years ago. By publishing them, it will
:15:39. > :15:43.save them from being delisted from the Tokyo stock exchange, which was
:15:44. > :15:49.a real worry. The figures are not great, but it means that for now it
:15:50. > :15:54.remains on the Tokyo stock exchange. Markets in Europe have been trading
:15:55. > :15:58.for 45 minutes, and they are all headed lower, following the same
:15:59. > :16:01.mood in Asia today, and the night before on Wall Street, real concern,
:16:02. > :16:05.as we have mentioned, with what is happening with regards to North
:16:06. > :16:06.Korea and the United States, something that is very relevant for
:16:07. > :16:08.our next conversation. Here's a question -
:16:09. > :16:10.does getting inside the mind of a potential radical extremist
:16:11. > :16:13.and persuading someone to buy a brand of washing powder require
:16:14. > :16:18.the same set of skills? He's a former UK army military
:16:19. > :16:21.intelligence reservist He's now runs marketing agencies
:16:22. > :16:36.Global Influence and Verbalisation. Using counterinsurgency
:16:37. > :16:38.skills to sell products, he has built up a client list
:16:39. > :16:54.that ranges from the FT to Nice to see you. We sort of hashtag
:16:55. > :17:01.away through that interview, trying to explain what you do, maybe you
:17:02. > :17:04.can do it better! It is a really fascinating area, trying to explain
:17:05. > :17:06.people to do things by talking to them in a language they understand
:17:07. > :17:14.ultimately, but there are clever ways you can do that. Essentially,
:17:15. > :17:19.there is a science of behaviour change, and using language to affect
:17:20. > :17:23.behaviour change, so really what my companies do is better and stand the
:17:24. > :17:27.target audience, using scientific techniques, to then verbally
:17:28. > :17:32.engineer language to increase empathy, really, between the
:17:33. > :17:36.audience and the product and message they are trying to bring to the
:17:37. > :17:40.audience. And language has become more important, hasn't it?
:17:41. > :17:46.Especially through social media, more so than perhaps images. Not
:17:47. > :17:52.least here we are sitting in a BBC studio, the 24 hour news cycle gets
:17:53. > :17:55.people, obviously, hooked on hearing more information, talking about more
:17:56. > :17:58.information. The difference between being informed and being
:17:59. > :18:03.well-informed is fundamentally important, and that is why we work
:18:04. > :18:06.with commercial brands such as the Times, who believe very firmly in a
:18:07. > :18:11.difference between informed and well-informed. You started the
:18:12. > :18:17.company six years ago, you described to me earlier that you had an
:18:18. > :18:21.epiphany in a trench - explain. Yes, in Afghanistan, we were having to
:18:22. > :18:25.power down at the bottom of a trench because of a situation going on
:18:26. > :18:30.around us, and as we were talking at the bottom of the trench, a group of
:18:31. > :18:34.soldiers and myself, we saw a little blue triangle on the floor, and it
:18:35. > :18:39.was only later that we worked out that they were arrowheads from
:18:40. > :18:42.Alexander the great. Fundamentally, we hadn't progressed in Afghanistan.
:18:43. > :18:48.A thousand years by using those techniques. That was sort of the
:18:49. > :18:54.moment when I thought we needed to create a business to help us with
:18:55. > :18:57.dialogue over division. Explain what you have done with dialogue over
:18:58. > :19:02.division in terms of work with young people, trying to prevent them from
:19:03. > :19:07.signing up to organisations like so-called Islamic State. One area of
:19:08. > :19:13.the company, of the two companies, is focused on helping charities and
:19:14. > :19:16.NGOs to intervene when people are being radicalised, to understand the
:19:17. > :19:21.language patterns that so-called Islamic State might be using to
:19:22. > :19:26.recruit these people, and then to create interventions, often online,
:19:27. > :19:29.to counteract that process. So, again, understanding the audience,
:19:30. > :19:33.decoding the psychology of the audience, and verbally engineering a
:19:34. > :19:39.more effective way to disrupt the messaging or provide a more dialogue
:19:40. > :19:42.based messaging step. And we might come into contact with this more
:19:43. > :19:48.than we expect, because marketers are using this as well. There is a
:19:49. > :19:53.slight difference, the marketing industry is using a certain kind of
:19:54. > :19:57.insight, a certain kind of insight methodologies that is not
:19:58. > :20:00.linguistically based. What we bring to the market is something pinpoint
:20:01. > :20:05.targeted at language analysis and the use of words more effectively.
:20:06. > :20:11.How big you know, though, that your method of persuasion are working? If
:20:12. > :20:15.we take a commercial client like the Times, they saw 200 36 cents
:20:16. > :20:18.increase in their yields... But how do you know that young people are
:20:19. > :20:22.not signing up to Islamic State because they watched a video you put
:20:23. > :20:27.together? In that particular instance, with a film we put out, a
:20:28. > :20:31.viral, there was a measure of the impact was the media reach, 500
:20:32. > :20:37.million media impressions in seven days, but we can also track and
:20:38. > :20:49.trace the conversations that our work influenced online. We have a
:20:50. > :20:52.great deal of KPIs to show behaviour change in that instance. Some people
:20:53. > :20:58.would call this a dark art, you are trying to convince somebody to do
:20:59. > :21:02.something they are not aware of, and that is all too true of selling
:21:03. > :21:05.stuff. Equally, when it comes to politicians, you know, a lot of
:21:06. > :21:11.political messaging is about persuading us to vote when a certain
:21:12. > :21:14.way, none more so than during the Brexit referendum. A lot of
:21:15. > :21:18.criticism of the claims and counterclaims, it is a dark art,
:21:19. > :21:24.isn't it? Not at all. First of all, if you have children, if you want, I
:21:25. > :21:27.have got two children, if you want them to go to bed, you have to
:21:28. > :21:33.understand the individual you are talking to. One of my children,
:21:34. > :21:37.let's play a game, race upstairs. The other one is, look, daddy is
:21:38. > :21:41.going to get angry if you don't go. You have to understand the audience
:21:42. > :21:46.to speak more effectively to them. But there is no ulterior motive, but
:21:47. > :21:50.if you are a political party with a particular persuasion, you want
:21:51. > :21:54.people to vote the way you think. The first thing to do is communicate
:21:55. > :21:59.your policy in an effective way. We lived through the area of Spain with
:22:00. > :22:06.top-down messaging. We are advocating much more dialogue based,
:22:07. > :22:09.empathy with the target audience, I think that is a good thing, not a
:22:10. > :22:13.bad thing. I think we will leave at there, apps I could use your skills
:22:14. > :22:20.in my home! I can't get my kids to bed ever! I go to bed before them
:22:21. > :22:24.now! But then I do get up at two in the morning.
:22:25. > :22:32.You have never mentioned that(!) A lot more to come in Business Live,
:22:33. > :22:41.this is how to stay in touch. The Business Live page
:22:42. > :22:43.is where you can stay ahead of all the day's
:22:44. > :22:45.breaking business news. We'll keep you up-to-date
:22:46. > :22:47.with all the latest details, with insight and analysis
:22:48. > :22:49.from the BBC's team of editors Get involved on the BBC business
:22:50. > :22:55.live web page, bbc.com/business, on Twitter @BBCBusiness and you can
:22:56. > :22:57.find us on Facebook Business Live on TV and online,
:22:58. > :23:10.whenever you need to know. Particularly about this story about
:23:11. > :23:14.Facebook moving into the television arena, we would get into that in a
:23:15. > :23:20.moment, but Maike is back, the story about the new boss of Lego going
:23:21. > :23:24.after eight months, tell us more. It is interesting, because he is the
:23:25. > :23:27.first non-Danish chief executive of Lego, he has only been in the job
:23:28. > :23:31.for eight months. They have said this was always the deal, since he
:23:32. > :23:36.was appointed they would start looking for a new chief executive,
:23:37. > :23:39.so there may or may not be more to the story, but what is interesting
:23:40. > :23:49.is that Lego is feeling the pressure. It dominates the
:23:50. > :23:54.construction aisle, but their biggest competitor is moving into
:23:55. > :24:03.that space. What do we know about this new guy? So interesting,
:24:04. > :24:10.because the first guy was there just eight months, and then another Dane.
:24:11. > :24:16.It does seem that way, but the new chief executive has got a very good
:24:17. > :24:22.track record. Is he good at building?! He is a master builder!
:24:23. > :24:27.Is good at increasing profits, which is what you want your chief
:24:28. > :24:30.executive to do. Isn't it everybody's dream job?
:24:31. > :24:34.We think it probably looks really easy to run.
:24:35. > :24:38.Everything is awesome! But to keep up with current
:24:39. > :24:44.trends... By the way, I'm just quoting a song from the Lego movie,
:24:45. > :24:49.that is not the BBC opinion of Lego! Because it is such an iconic brand,
:24:50. > :24:53.there is so much and tapped potential, and in this world of new
:24:54. > :24:58.technologies, there is so much you could do, so you need someone very
:24:59. > :25:01.forward thinking. That moves us nicely onto Facebook, we have been
:25:02. > :25:07.asking your views about watching TV through Facebook. The journal is
:25:08. > :25:12.talking about how Facebook squashes, edition from start-ups. All well and
:25:13. > :25:23.good them coming up with good ideas, but Facebook I'd buys them or copies
:25:24. > :25:27.them. These big tech giants can afford to sweep up the start-ups,
:25:28. > :25:34.and it raises a few questions about the future of the tech sector, so we
:25:35. > :25:41.have those big giants, Facebook, Google, Amazon, with deep pockets,
:25:42. > :25:47.spending cash to buy up smaller companies like Snapchat, WhatsApp,
:25:48. > :25:52.Instagram, to expand. Just to say, Snapchat's earnings are out today,
:25:53. > :25:56.and in terms of your views on Facebook, Matt says, I'm worried it
:25:57. > :26:00.will be the perfect forum for fake news and alternative facts. Alex
:26:01. > :26:02.says, not at all, I want to sit on my sofa, not watch it on a tiny
:26:03. > :26:16.screen. Bye-bye. I am pleased to say that this
:26:17. > :26:19.morning is a much sunnier start than yesterday, some really quite heavy
:26:20. > :26:21.rain in the south-east yesterday, rainfall totals