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QUEST MEANS BUSINESS
Italy, France, Germany Call for Asylum Review; Human Cost of Migrant Crisis; European Asylum Review; Europe Struggles to Deal With Number of Migrants; US Stocks Bounce Back; European Markets Close Higher; Market Volatility; White House Gets Support for Iran Nuclear Deal; US Frackers Hit By Low Oil Prices. Aired 4-5p ET.
Aired September 2, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:59:55] (NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: The market closing what looks like to be the best of the session, up nearly 300 points on a day almost the reversal of
yesterday, green right the way through the trading day, even though Asia was down.
QUEST: And tall man hits with little gavel as trading comes to a close on Wednesday, it's the 2nd of September.
Tonight, Europe takes its first steps to fix its migrant crisis. Germany, Italy, and France demanding a asylum overhaul.
The markets have staged a Wednesday rebound. It's another triple- digit move for the Dow.
And Rupert Murdoch's prodigal daughter returns. Rebekah Brooks is back at News Corps.
I'm Richard Quest. I mean business.
Good evening. Europe's migrant crisis continues, and in many ways, is getting worse. And tonight, the three biggest economies on mainland Europe
are demanding the EU's asylum rules be overhauled. As the crisis mounts on the continent's eastern doorstep, Italy, France, and Germany say the
current system's broken and a united response is needed.
Meanwhile, in northern France, hundreds of migrants storm the railroad tracks near Calais. They're attempting to reach Britain, and they shut
down the vital Eurostar, the Eurotunnel connection, Paris and London.
And in Hungary, scenes of growing desperation. After escaping war and chaos, migrants are still waiting to board trains headed for other parts of
northern Europe. Zoltan Kovacs is the Hungarian government spokesman and says his country is upholding the law.
(BEGIN VIDEO CLIP)
ZOLTAN KOVACS, HUNGARIAN GOVERNMENT SPOKESMAN: The only real solution is if nations ask illegal migrants abide the rules. That is, they go to
the shelters, to those places that have been assigned to them. And obviously, we are not going institutionalize an illegal situation that is
at the railway station at the moment.
(END VIDEO CLIP)
QUEST: Now, there are times when a single image, a photograph, pulls the horror of a crisis bluntly into focus. I need to warn you, the
photograph we are about to show you is agonizing. It is distressing and, quite simply, it is painful. You may wish to look away for the next moment
We believe, though, this photograph emphasizes the calamity facing those fleeing the horrors of their homelands, risking death for a better
live. People are dying, and in some cases, they are too young and innocent to speak for themselves. And today, among the dead, is the boy in the red
This boy was found washed ashore, lifeless, near Bodrum on the Turkish coast. We believe the child to be Syrian. His family was attempting to
cross the Mediterranean, reaching the island of Kos in Greece. His mother may have also drowned when their boat capsized.
We don't know how many people the boat was carrying. We know at least 12 are now dead, including the boy in the red shirt.
Hala Gorani joins me from Berlin this evening. Hala, we've heard that there's to be this coordinated response, but what does a coordinated
response mean practically?
HALA GORANI, CNN INTERNATIONAL CORRESPONDENT: Well, what France, Germany, and Italy have agreed to do is to review asylum rules that are
about a quarter century old. They just do not apply to the current situation anymore.
The protocol that calls for asylum seekers to register and request asylum in the first port of call, which is the first country that they
reach, in many cases in Europe, it is Italy, it is also Greece. They have signed a document that calls for a review of those rules. This is not a
rule change, this is still very much a preliminary step.
The question, though, is why is Europe not able -- after all, it is a common political project -- why is it not able to come up with a unified,
harmonized response to what is the biggest migrant crisis on this continent since the end of the second World War.
[16:05:00] We're seeing so many different responses. Italy, on the one hand. Greece, for instance, with no reception centers in Kos.
Hungary, that will not allow many of the refugees to travel on because it says they are not following the rules.
Germany that is unfurling a welcome mat like no other country apart from Sweden in this continent. The UK, that after all, is only offering a
few hundred resettlement spots for Syrians. So, you just see based only --
GORANI: -- on the initial response how disparate and how different -- differently each country is addressing this crisis. So, to come up with a
harmonized response right now, I think, is a tall order, and doesn't appear to be happening anytime soon, Richard.
QUEST: But -- OK. So, if they're going to have a difficulty, but the immediate crisis and the tragedy -- I mean, we've been talking about it
this evening -- Hala, when we talk about the photograph of the boy in the red shirt, you are in the heart of Europe tonight. Have pictures -- has
that photograph shocked people?
GORANI: Absolutely. Absolutely. I mean, it has gone viral online. It is on the front pages of most of the European papers that have already
essentially indicated what they will lead with tomorrow, including "Bild," the German newspaper, whose editor-in-chief we interviewed on the program
just a few minutes ago.
It has shocked people, but will it change policy at the highest levels of government? It doesn't appear as though it will. And if it does, it is
taking a very long time, and this situation requires a response -- a very quick response, because people are, indeed, dying every single day.
But it is shocking people, and people are talking about it. The question is whether the politicians in charge are going to act quickly
QUEST: Hala Gorani, who's in Berlin, covering that this evening. Hala, thank you.
Now, one of the key issues in all of this has been the inability of Europe, as Hala was saying, to come up with this harmonized response. It's
not the first time, of course, whether it's been the eurozone crisis, the issue over Greece, time and again over the 2008 crisis, Europe has failed
to have the institutions necessary.
Guy Verhofstadt is the former Belgian minister. He's the leader of European parliament's liberal alliance, and he says like these other
crises, the refugee issue today has exposed the EU's deep structural flaws.
GUY VERHOFSTADT, ALLIANCE OF LIBERALS AND DEMOCRATS FOR EUROPE: It means that we need absolutely to reform these institutions. We need it to
tackle the euro crisis, we know that. We need a political union, economic union, a treasury in Europe, otherwise the currency, the single currency,
is not sustainable.
But the same is happening on the refugee crisis, because we don't have an external border control by all member states together. We have a
Schengen area, but we have not an external border control of this area.
We don't have a common asylum system. It is still 28 different systems. And we don't have a legal migration policy in the European Union.
So, it is impossible to solve this refugee crisis if first of all we don't put in place these tools and these institutions.
QUEST: Right. Well, I can hear Europeans say, you may be right, Mr. Verhofstadt, but it's a disgrace that we don't have them. And bearing in
mind the size and scale of the European institutions, what on Earth are they all up to if they're not dealing and being able to deal with crises
VERHOFSTADT: It's a disgrace, but the disgrace is not for the European Union. The disgrace is for the member states, because it is the
member states who don't want to create one big agency responsible for the protection of the external borders. It is the nation states, the member
states, who don't want to establish one European asylum system in which we use and apply the same rules --
VERHOFSTADT: -- and the same system.
QUEST: But we're seeing this in real time with real human misery at the moment. And I'll give you an example.
QUEST: The player that everybody wants to hear from at the moment is not Donald Tusk or Jean-Claude Juncker. The player everyone wants to hear
from is Angela Merkel. It proves your point, but it doesn't make it any easier to get that common policy that you seek.
VERHOFSTADT: Angela Merkel cannot on herself solve this problem. She can maybe take -- and I hope she is doing it -- several hundred thousand of
these refugees, mainly Syrian refugees.
[16:10:05] But alone, even Angela Merkel is not capable to solve this crisis. She needs the cooperation of the 28 member states. And moreover,
she needs the cooperation --
VERHOFSTADT: -- of the European Union. Let me give you one example. Let me -- let's as fast as possible create safe havens, facilities in the
zones of conflict, in countries like Libya and Egypt, instead of what we are doing now.
Now we oblige people to come to Europe to ask for asylum. Why not creating the possibility for these refugees to ask for asylum or to ask for
a temporary protection in the zone of conflict and in these countries like Libya, Egypt, Lebanon, or Turkey?
QUEST: How damaging do you think this crisis, this migrant crisis -- not so much on the humane side, which is absolutely appalling, but for the
European side, for the EU and the EC, the inability to seemingly deal with any crisis?
VERHOFSTADT: It's enormous -- it's damaging. It's -- I think, Richard, it is more damaging than, for example, the euro crisis. Because
the euro crisis is about figures. Here we are talking about human lives. Human lives who are even lost like, for example, with these tragedies in
And so, it's absolutely necessary that in the coming weeks, I think there is an extraordinary European summit to try to develop such a
holistic, global approach to this crisis.
QUEST: But when they do sit down to have that summit in a couple of weeks, do you believe it is even possible to get a common approach, or will
we end up with classic euro fudge?
VERHOFSTADT: I hope that this time it's got to be different. Because the problems we are facing are so huge that the member states are obliged
to go in a European direction. Until now, it was a problem for Italy because it was problems, tragedies, near Lampedusa. Until now, it was a
problem only maybe for Hungary, because there is an enormous flow of refugees to Budapest.
But what we have seen the last days and the last weeks is that it is a tragedy everywhere in Europe. Every country in the European Union is
affected, be it Britain, be it France, be it Belgium, be it Germany.
And it means that our leaders are now really aware of the necessity, I think, to make a jump forward and to develop this European asylum system
that we don't have. This European legal migration system, what we don't have, and this common protection of our external borders on a mandatory
basis and not on a voluntary basis as is the case now.
QUEST: Guy Verhofstadt talking to me from the European Parliament. And many of you will be wondering how you can help the migrants and the
refugees, and CNN's Impact Your World website has the links and the information you need. It is at cnn.com/impact.
We'll be right back. This is QUEST MEANS BUSINESS.
QUEST: So, yesterday was a sea of red across the markets, and over the course of the week, we have seen losses. But now, shares absolutely
bounce back after two days of turmoil. And I suppose you'd say up 300 points is also turmoil, but turmoil in the other direction.
[16:15:05] The closing bell, it ended more than 290 points up, 293. The S&P and the NASDAQ also edged higher by more than 1 percent. And the
best -- I do believe that's the best of the day where the market closed.
And stocks in Europe also recovered. Look at the numbers. Not, perhaps, as impressive as New York, but the FTSE, the DAX, and others all
were higher. This was despite the fact that Asia had another rocky session. So, Gillian Tett is the managing editor -- the US managing editor
of the "Financial Times."
GILLIAN TETT, US MANAGING EDITOR, "FINANCIAL TIMES": Good to see you.
QUEST: What's going on?
TETT: A lot of volatility. I mean, the one column message over the last few weeks is that volatility and uncertainty is back.
QUEST: But we -- is it? Because you and I were talking about this last week, and you said volatility. And we sort of know what volatility
means. And then you see it.
QUEST: And when you see it, it looks worse than it sounds.
TETT: Well, yes and no. What you have a the moment is the usual kind of summer madness where basically markets are a bit unhinged because a lot
of the bosses have been on the beaches. You have computer trading changing the way that markets are being actually traded right now, functioning.
Regulatory changes have also cut liquidity in some asset classes.
But the big issue right now is a lot of our economic uncertainty. You have uncertainty about China, that is a riddle wrapped inside of a
conundrum wrapped inside of a mystery, as I'm fond of saying. You've got a lot of uncertainty about what's happening with OPEC and the oil price. And
then, of course, you've got the matter of US interest rates.
QUEST: Of all of those three -- and Christine Lagarde talked about them in her speech in Indonesia.
QUEST: Of all of these, which do you place the most emphasis on at the moment?
TETT: Well, I think China has been the one that's really spooked people, because there's a sense that not only has China been driving a lot
of the optimism about global growth in recent years, but people just can't quite get a handle about what's actually happening there.
It's almost as hard to understand as those sub-prime CDOs back in 2007 and 2008. People are now waking up and realizing they have exposure to
this. They're not quite sure, though, how to measure its impact.
QUEST: And if we look at the United States, as you are the US managing editor --
QUEST: -- you've go the Fed aspect to it. From those Fed minutes and what Fischer said at Jackson Hole and others since -- we're getting
employment numbers on Friday, so -- but where do you feel that the balance on a Fed rise in September is at the moment?
TETT: Well, Fed officials keep chanting we are data dependent, data dependent, which is kind of slightly at odds with other aspects of Fed
policy, because they also came to have been time dependent, i.e. wanting to raise rates before a certain set time.
And the question you need to ask right now is which data? Because the inflation data actually gives no reason to raise rates. The unemployment
data probably does and probably will on Friday.
My hunch is that they probably will act sooner rather than later, because I know a number of the Fed officials are keen to normalize rates,
and a small 25 basis point rise is not that dramatic. But certainly, if the markets do become a lot more unstable, the pressure will be on them to
wait a bit longer.
QUEST: You see, I always thought what a fuss over when you do the first rise. I mean, what a fuss. What difference does it make when you do
the -- ? But of course, the moment the first rise happens --
TETT: Well --
QUEST: -- then you and I, you're sitting in that chair, I'm sitting in this chair saying, when's the next one, Gillian? When's the next one?
TETT: Well, what the Fed officials desperately hope, Fed governors, is that they can raise a little bit, and then nothing will happen for quite
a long time, and then they creep up gradually and slowly.
In reality, what Peter Fisher, great economist, has observed is that what's more likely to happen is you have to imagine Janet Yellen in a
swimming pool with a giant ball underneath her chin, or holding underneath her chin, OK?
Strange image, but imagine Janet Yellen in a swimming pool with a giant inflatable ball, and she's holding it under the water, and she keeps
saying, not now, not now, not now. And then suddenly she let's go, and the ball pops up and knocks you on the chin.
And the danger is, that when she lets go of that ball, when interest rates start to rise up a bit, they will pop up much faster than people
expect and cause more turmoil.
Now, maybe that's being too gloomy, but what we know from the last few days is that investor confidence is quite fragile right now. Markets are
reacting a lightning speed to all kinds of things. So, if there was ever a moment when you kind of feel nervous about letting go of that ball, it
might be now.
I still think they probably well. I personally think they probably should. But it's certainly a reason to feel uncertain.
QUEST: I think you might have just put me off my dinner --
QUEST: -- with all -- you put a picture to my mind that is --
TETT: Well, hey, who knew that monetary policy could be quite so vivid?
QUEST: Janet Yellen in a swimming pool with --
TETT: A beach ball.
QUEST: A beach ball.
[16:20:00] QUEST: Thank you. Once -- thank you, Gillian. Once they were a driving force of the US economy. Now, many of the US frackers are
fighting for survival. I'll show you how some are still managing to prosper. Our special series on oil continues.
QUEST: A major breakthrough for the Iran nuclear deal. The White House says it's earned enough congressional support to ensure it won't be
stopped by Republican opponents. US secretary of state John Kerry says while they have the minimum number needed, the administration will try to
get even more US lawmakers onboard.
The secretary of state is trying to reassure senators the money Tehran receives from sanctions relief won't help Iranian terrorists, and business
impact won't happen overnight. Talking to my colleague Christiane Amanpour, John Kerry discussed how long it will take for the Iranian
business to feel the benefit.
(BEGIN VIDEO CLIP)
JOHN KERRY, US SECRETARY OF STATE: Business in Iran will not be able to take off until Iran has done all of the things that it has to do in
order to expand the breakout time and live up to this agreement. That could take six months to a year.
(END VIDEO CLIP)
QUEST: What's happening with Iran is one reason of what's going on in the market. Oil prices fell shortly after the news that Iran nuclear deal
was in the bag. More Iranian oil pouring into the system. Crude then turned higher, erasing those gains.
Really, it is so volatile at the moment because of a variety of reasons, including the Fed's beige book, which showed that Brent and WTI,
West Texas, all finished with gains of just around 1.5 points. But you can see the spreads have increased in some cases, as opposed to where they were
earlier in the week.
For producers in the United States, the prospect of more cheap oil will cause more pain. After all, when you look at he frackers, they need a
certain high price, thought to be maybe in excess of $60 a barrel, before they can make money out of shale oil. The issue of shale oil, it's all
part of the global price war.
QUEST (voice-over): They knew it was just a matter of time.
UNIDENTIFIED MALE: The thing goes to well here, and then down the cases.
QUEST: Two years ago, the oil men of West Texas were riding high.
QUEST (on camera): Oh, my goodness.
QUEST (voice-over): Oil was over $100 a barrel.
UNIDENTIFIED MALE: That's liquid gold.
QUEST: They didn't gloat. They knew very well the history of oil.
QUEST (on camera): You don't believe it's here to last.
UNIDENTIFIED MALE: No, sir, it's not here to last. I've done been through two of them. Two of the busts. It just comes and goes, it's part
QUEST (voice-over): That was the boom, then came the bust. On the floor of the Nimex, where they place bets on the future price of crude,
traders have been rocked by huge price swings.
UNIDENTIFIED MALE: It's been very tough, the market really is -- has been very unforgiving here.
QUEST: The problem is there's oil everywhere. The frackers keep pumping, production's only fallen slightly from near record levels. And
Saudi Arabia is priming the pumps. The story of the past few weeks, volatility. Oil bounced back in the last days of August, and the frackers
are still in a tough spot.
[16:25:01] UNIDENTIFIED MALE: The firming up that we've seen in the prices doesn't change the fundamental fact that you're still very much in
an oversupplied situation. We've got far too much supply for too little demand.
QUEST: The frackers who've resisted pressure to cut may be forced to do so soon. The bankers are running out of patience.
UNIDENTIFIED MALE: October is a point where the banks will re-look at how much they want to be giving out in loans. The amount of capital that
these companies can get a hold of may start to be pinched off.
QUEST: Investors are already running scared. Energy stocks have been volatile. Bonds issued by energy producers are losing billions of value.
Oil and gas firms Quicksilver Resources and Endeavor International have filed for bankruptcy, and the fear is more firms may fail.
UNIDENTIFIED MALE: At some point, you'll see more merger or bankruptcy, and then acquisition.
QUEST: From West Texas to the badlands of North Dakota, the new age of oil barons relish the battles with OPEC and insist they will survive.
UNIDENTIFIED MALE: The Saudis and the OPEC haven't killed American oil, haven't killed American shale. What they've done is make it faster,
stronger, better, and more ready to compete with them going forward.
QUEST: Oil enjoyed its biggest rally in decades over the past week. Still, the US energy landscape could look very different very soon.
QUEST: Rebekah Brooks is back. It's a remarkable comeback for a Rupert Murdoch favorite after the former tabloid editor became headline
news herself. QUEST MEANS BUSINESS.
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in a moment, when the chief exec of Netflix tells us why he's not concerned
about competition from Apple.
And a new scam is targeting small businesses on Wikipedia. The encyclopedia's founder, Jimmy Wales, will be with us this evening.
Before that, this is CNN, and on this network, the news always comes first.
Italy, Germany, and France are calling for a review of Europe's rules around granting asylum. They issued a joint statement today saying there
must be a fair distribution of refugees throughout the EU. Speaking to me on QUEST MEANS BUSINESS, the head of the European parliament's liberal
ring, Guy Verhofstadt, says the EU's handling of the crisis is damaging its reputation.
(BEGIN VIDEO CLIP)
[16:29:55] VERHOFSTADT: I think, Richard, it is more damaging than, for example, the euro crisis. Because the euro crisis is about figures.
Here we are talking about human lives. It's absolutely necessary that in the coming weeks, I think there is an extraordinary European summit to try
to develop such a holistic, global approach to this crisis.
(END VIDEO CLIP)
QUEST: ISIS has claimed responsibility for two suicide bomb attacks that have killed at least 28 people at the Yemeni city of Sanaa. According
to the Houthi-controlled state media, the first attack targeted a mosque in a pro-Houthi neighborhood. The second bombing happened as civilians tried
to help those who were hurt.
Barack Obama appears to have won a major victory in Congress. He now has secured enough support in the U.S. Senate to ensure the Iran nuclear
deal goes ahead.
Earlier, the Secretary of State John Kerry said governments and businesses have a shared interest in seeing the deal succeed.
JOHN KERRY, U.S. SECRETARY OF STATE: Many nations that would like to do business with Iran agreed to hold back because of the sanctions and -
and this is vital - and because they wanted to prevent Iran from acquiring a nuclear weapon.
They have as much interest in it as we do. And that's why they hoped the negotiations would succeed, and that's why they will join us in
insisting that Iran live up to its obligations. But they will not join us if we unilaterally walk away from the very deal that the sanctions were
designed to bring about.
QUEST: Kidnappers have abducted a group of Turkish construction workers in a Shiite-dominated area of Baghdad. The 18 men were helping to
build a sports stadium in the Sadr City neighborhood north of the Iraqi capital.
The abductors reportedly stormed into the workers' quarters before dawn. They were wearing military uniforms. So far there has been no claim
Rebekah Brooks is back at News Corp. It's been four years since the former tabloid editor emerged as a central figure in the U.K.'s phone-
hacking scandal that threatened Rupert Murdoch's media empire.
Rebekah Brooks will now run the company's U.K. division which is - for someone who had three successive British prime ministers on speed dial - a
The former editor of "The Sun" and defunct "News of the World" stepped down as CEO of "News International" at the height of the scandal in 2011.
She was arrested on suspicion of being involved in the hacking phone scandal. An eight-month trial followed in October 2013. Rebekah Brooks
was cleared of all phone hacking charges by a jury last year. And today she said she's delighted to be returning to News Corporation.
Porter Bibb is the managing partner of Mediatech Capital Partners, the first publisher of "Rolling Stone" magazine.
PORTER BIBB, MANAGING PARTNER, MEDIATECH CAPITAL PARTNERS: Richard, pleasure.
QUEST: Now, our conversation - our interview here - she was acquitted, therefore there is no reason in law - or as some would say
propriety why she shouldn't be reinstated.
BIBB: Absolutely. And there's a reason, an ulterior motive I think why Rupert Murdoch has put her back in. Because she initially told him she
was never going back.
QUEST: So what's that motive?
BIBB: The motive is the fact that last month the courts handed the Metropolitan Police in London - handed over the file on the entire hacking
situation and all of the people who were brought to court over the last three years choose a Crown Prosecution.
And the Crown is likely to begin new legislation or indictments of some of the board members of News Corp.
QUEST: So they're going to go for the corporation?
BIBB: They're going to go for the directors -- they violated their directorial fiduciary responsibility. Rupert and News Corp beat the U.S.
on foreign corrupt practices - the U.S. is not going to sue them. But having Rebekah as the CEO of News Corp U.K., having been vindicated in the
courts, helps them fend off the Crown prosecutor.
QUEST: It's still an extraordinary move though, isn't it?
BIBB: Oh, absolutely.
QUEST: I mean, that she would even want to go back.
BIBB: Well, the other reason is purely business and that's the fact that she is now overseeing "The Sun," "The Sun" has been drifting south
very quickly. It did not work on the digital side. They put a paywall up and nobody paid. She's got to come in and reinvigorate that business
because that's the biggest-selling newspaper in the U.K.
QUEST: Whatever one may think of how she handled the newspapers, the argument against Rebekah Brooks - I mean, she's clearly been found not
[16:35:02] BIBB: That's clear.
QUEST: But the argument always has been - well she was either guilty - well, she's clearly not - therefore she must be incompetent, because how
could she not know -
BIBB: Well, that was the prosecutor's main argument, yes.
QUEST: -- well if she's not guilty, which she's not, therefore you're left with she can't have been a very good manager if all that was happening
BIBB: It also happened under Jamie Murdoch who was her boss at the time and both of them - it's inconceivable to the man in the street that
hundreds of thousands of pounds worth of checks were issued as bribes and payoffs to military and police officials to get the hacking numbers, and
nobody ever was found guilty.
QUEST: One has to admire Rupert Murdoch's loyalty to his staff which, arguably some would say, is admirable in a corporate culture where the mere
whiff of scandal has chairman and board sacking people at a great rate.
BIBB: Well, he's protecting his company and his family's interest because, among other things, not only is the Crown Prosecution likely to
come after the board members of News Corp U.K., but Jamie is still the chairman of BSkyB, and this whole episode - the hacking episode - cost
Rupert billions of dollars. He couldn't take control of BSkyB.
QUEST: Right, but finally, has, from your soundings are the public in the U.K. just sick and tired of this? They know something's smelly and
nasty took place.
BIBB: There's a huge amount of unrest - particularly among the hacking victims - the celebrities as well as -
QUEST: But the public don't want any more - it's over, it's done, it's -
BIBB: -- they want it behind them but there's such a distaste now for the general media personalities that are running the papers in the U.K.
QUEST: Good to see you, sir.
BIBB: All right.
QUEST: Thank you so much.
QUEST: Netflix has its eye on expanding in Asia, not on possible competition from Apple. That's according to the chief executive Reed
Hastings. The streaming service launched today in Japan, and Hastings says he's looking forward and towards India and China in 2016.
Netflix shares closed lower for the third session, now (AUDIO GAP) off about 10 percent over the past three days on Apple rumors and a variety of
Hastings told Kristie Lu Stout the idea of other companies producing their programming is not really that big a deal.
REED HASTINGS, FOUNDER AND CEO, NETFLIX: You know, we've been expanding so rapidly, Kristie, around the world - Latin America, U.K.,
France, Germany, now finally Japan and next year we hope to open in the rest of the world including all of Asia.
KRISTIE LU STOUT, CNN ANCHOR AND CORRESPONDENT: Do you plan to open up in India or China any time soon?
HASTINGS: We hope next year to be able to launch everywhere, including Hong Kong, including China, India. We're making out plans. But
today we're really excited about our launch in Japan.
STOUT: You're very excited about your launch in Japan today. Are you going to be creating tailored content for the Japanese market?
HASTINGS: In fact, we've been working with local partners like Fuji TV to create original shows - "Terrace House," "Underwear" - many other
STOUT: Now Reed, I've got to ask you about these reports from Apple - - Apple execs purportedly talking to Hollywood, looking into getting into original programming.
What are your thoughts on these reports and what impact it could have on Netflix?
HASTINGS: You know, we've got so many great original shows out. Our new one, "Narcos" just launched about the history of cocaine and the great
trauma in Latin America in the `80s.
And other people are doing shows too - HBO is doing shows, FX are doing shows, BBC.
So the fact that additional tech companies may be doing shows, that's really not that big a deal in the total number of shows being produced
around the world. Our focus is great shows and we're executing on that.
STOUT: All right. We've also learned that this week that Netflix is losing a number of movie titles, for example "World War Z," "Hunger Games"
franchise. We know that you are famous for your original series, but Netflix made its name as this massive repository for movies.
So do you fear as you lose more movie titles that you could also be losing subscribers along the way?
HASTINGS: So those movie titles are only in the U.S. In the rest of the world our expansion and movie titles is continuing. We're adding new
titles all the time. And our core focus is on these new movies we're bringing out.
We're debuting theatrically - like "Beast of No Nation" that's going to launch in September and October around the world, debuting on Netflix in
movie theaters at essentially the same time.
QUEST: The CEO of Netflix. Another entertainment company whose share price has been sliding recently is Disney.
[16:40:01] But Disney's using new technology to entice fresh visitors to the gates of Disney World. We're going to talk about that on the
"Business Traveller Update" next.
QUEST: Most of Europe enjoyed a public holiday earlier this week and the United States has the end-of- the-summer long weekend coming up as of
It's all a perfect chance to go and see and experience something different, maybe an amusement arcade or park. Disney World in Orlando,
Florida is one of the world's oldest and most visited theme park attractions in the world.
Tens of millions visit every year. As I found out for this week's "Business Traveller" it now has something up its sleeve to lure new fans
through the gates.
QUEST: After 40 years, the Disney World experience was perhaps becoming a bit tired. It needed to be refreshed, millennials needed to be
enticed, Disney needed to rethink.
It's involved the creation of this - the MyMagic+ System, - a billion- dollar plan that would change how the guests interact t Disney World.
The changes begin when you book your tickets. MyMagic+ helps you navigate the daunting task of planning the parks - from rides to dining to
making reservations. It's on the circumference of your wrist.
Phil Holmes is the vice president of The Magic Kingdom. And when you came here 40-odd years ago, --
PHIL HOLMES, VICE PRESIDENT, MAGIC KINGDOM: Yes.
QUEST: -- there were turnstiles here which aren't here now.
HOLMES: That's exactly right.
QUEST: Tell me about that.
HOLMES: So the transformation was really a part of the MyMagic+ overarching goal was we wanted to eliminate barriers, we want to keep your
family together, we wanted to remove as many hassles as we could.
So, magic band, you take Mickey, touch into Mickey. Any finger you choose you can put right here on the (AUDIO GAP) put one of your fingers
there. All green means you are good to go.
QUEST: OK, one of the things I've just done is give my fingerprint.
HOLMES: So, the good news is we're not gathering fingerprints. There really is a biometric read that just understands which finger you're
placing and so that finger identifies that your ticket and that person are always together.
Guests used to carry a multitude of things - everything from their room key to their ticket to a photo pass so when they were taking photos,
even method of payment. So a whole variety of things - and FastPasses.
All those things now can be done off of this band.
[16:45:00] QUEST: With the Seven Dwarfs mine train ride which is Disney's newest, we can see exactly how they've brought together all the
elements of the technology. The app, My Disney Experience, tells me as a standby there's an 80-minute wait. (QUEST BALKS) 80 minutes?
Not a bit of it. Using MyMagic+ wristband, I've already booked ahead, I use the FastPass+ entrance and basically I just say, "Bye."
QUEST: A day out at Disney, which still costs you the best part of $100 a day. Blackmail at Wikipedia (RINGS BELL). Hundreds of editors'
accounts are purged after an extortion ring is exposed. It's all about "sock puppets."
QUEST: Wikipedia has blocked hundreds of so-called "sock puppet" accounts thought to be involved in extorting payments from businesses and
Disgraceful. The term "sock puppet" just in case you're not familiar, it refers to a false identity set up to promote a specific viewpoint.
Now here is what the investigation found. A business or celebrity would write an entry for itself and then it would submit it to Wikipedia.
The entry would then sometimes be rejected for violating Wikipedia's guidelines. Now what's fascinating is the rejection - the article will be
blocked by a sock puppet editor within Wikipedia. And these are the sock puppets.
The editor then offers to rewrite - or the sock puppet - rewrite a Wikipedia entry into a sock puppet account for a fee. Now after the
article is posted, the editor asks for protection money to prevent edits to the particle (ph) in the future.
All in all, it's all because the sock puppet is actually doing the work. Wikipedia's founder Jimmy Wales joins me now from London to talk
about the investigation.
Sir, you must have been pretty horrified when you heard and discovered what was going on.
JIMMY WALES, FOUNDER, WIKIPEDIA: Oh, yes. I mean, I think our whole community was horrified. This came up from our core editing community who
noticed something funny going on a few weeks back.
They launched a major full-scale investigation. We found some 300 and something accounts. That doesn't mean there are 300 and something people
do this because they're sock puppets.
It could be one or two people and we've just banned all those accounts, we've deleted about 200 articles so the community can assess them
from scratch and rewrite them if they're valid articles. But it's the kind of thing that really, really annoys us.
QUEST: I mean, is your objection - in this case it was fraud, it was straightforward fraud -
WALES: Yes, straightforward fraud, yes.
QUEST: -- but where - yes, criminality - but where somebody is paying a fee to have somebody else write their Wikipedia page so that they make
the best job that they possibly can. You know, the best foot forward - you don't object to that?
WALES: Oh no, we do. We very much object to that. We think that if someone is being paid to be an advocate they need to disclose that fact
openly. We try to work with people.
[16:50:11] We have tons of volunteers, so we want to do this for people for free. We don't want anybody ever to have to pay to get their
Wikipedia entry improved because that's what we do. We try to make it as good as we possibly can.
So this is something we very much frown on. And one of the reasons is we want people to trust that Wikipedia's editorial judgments are made by
people who are coming in it from a very geeky academic Wikipedia point of view, not, you know, PR, puff and spin.
QUEST: Right. And that of course - because of that - it's inevitable to some extent that you're going to be buffeted from these commercial
pressures time and again.
Again, not so much - I mean the criminality part is -
QUEST: -- on its own, it's so igernerous (ph) to some extent. But there's always going to be people who want to get their - to be able to get
their hands on it.
QUEST: That's your big problem.
WALES: Yes. Yes, there's always something going on. One of the things that people may assume that turns out not to be true is like your
major reputable PR firms.
So, Adelman for example was one of the leaders in coming up with ethical principles and signing onto an agreement to say we don't do it this
way, we don't go in and pretend to be fake people, we don't do this.
We approach with transparency. We talk to lokipedians (ph) in the same way that we would -
WALES: -- talk to "The New York Times." You know, if you got a problem, call us up, we'll have a chat.
QUEST: Talking about the financing for Wikipedia for a second if we may. It is always precarious at best and one always wonders, you know, --
it's always sort of hand to mouth to some extent. But that's inevitable, isn't it? If you don't want to take the big corporate bucks.
WALES: Yes, I mean, precarious I would push back on a little bit.
QUEST: All right.
WALES: The public has been very generous and we try to run in a very financially-responsible way and try to build up a decent reserve and things
But it is important. Like fundraising we have to take very seriously - it's really important for us that the small donors - ordinary people
giving $20 bucks, $50 bucks, that we have that kind of money coming in so that the community can remain independent.
So that no one can say to us, `Oh, how about $100,000 to do this or that?' And we say, `Well, no. Like why would we do that ? We've got the
public behind us.'
QUEST: When we finish this interview, sir, we'll think about sending you our sock puppets that we were using. Sock puppets for your desk.
QUEST: Thank you very much for joining us. Good to see you as always.
WALES: Very good. Thanks for having me on.
QUEST: Donald Trump has long used social media to fire off criticism at his opponents. Now it seems his Republican challenger Jeb Bush is
taking a page out of Trump's book.
Turning to social media, blasting his rival. Sara Murray has more.
SARA MURRAY, CNN CORRESPONDENT: So much for Jeb Bush holding his fire. We're now seeing heated attacks between Jeb Bush and Donald Trump.
Floundering in the polls, Jeb Bush firing off his harshest attack so far, using Donald Trump's own words against him in this YouTube video.
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: My views are a little bit different than if I lived in Iowa.
Partial birth abortion. I'm very pro-choice.
MURRAY: In an interview tonight with CNN, Trump dismissing that attack.
TRUMP: One other thing I'll say because he mentions the fact that I was at one point a Democrat. Well, in New York City everybody was a
Democrat. Whoever wins the Democrat primary is automatically - that's, you know - there was almost no election because the Republicans hardly exist in
New York City.
MURRAY: But Bush isn't limiting his attacks to the Web. He's also taking it to the campaign trail.
JEB BUSH, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: If you look at his record of what he believes, he supports Democrats. This is not a guy who's
a conservative. And using his own words is not a mischaracterization -- they came out of his own mouth.
MURRAY: So much for the low-energy candidate.
TRUMP: Jeb Bush is a low-energy person. For him to get things done is hard. He's very low energy.
MURRAY: Bush trying to show he has a sharp edge - retaliating against Trump for an onslaught of attacks via Instagram, the latest showing Bush
complimenting Democratic frontrunner Hillary Clinton.
BUSH: We recognize the commitment of someone who has devoted her life to public service. I want to say thank you to both Secretary Clinton and
to President Clinton.
MURRAY: Trump also hitting his opponent on Twitter today, calling the latest shot from Bush, "yet another weak hit by a candidate with a failing
campaign. Will Jeb sink as low in the polls as others who have gone after me? "
The escalating public battle between Trump and Bush all as Dr. Ben Carson quietly surges. The retired neurosurgeon suddenly tied with Trump
in Iowa, rallying the state's evangelical voters.
DR. BEN CARSON, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: We have to stop listening to these people who tell us that we cannot talk about God,
we cannot talk about our faith.
[16:55:03] MURRAY: Amidst all the Republican infighting, we're seeing another story line emerge with these GOP contenders - an effort to win
If you were paying attention to Jeb Bush, you saw his toughest attack lines on Trump were actually delivered in Spanish. Meanwhile, it looks
like Trump is doing his own outreach, having a private meeting with the CEO of the Hispanic Chamber of Commerce. Sara Murray, CNN Washington.
QUEST: How nice to see that the art of discourteous and decent discourse still exists in American politics. A "Profitable Moment" is next
QUEST: Tonight's "Profitable Moment." As European governments consider exactly what they should do to handle the migrant crisis. Guy
Verhofstadt tonight on this program made it quite clear that once again European structures and institutions, policies and practices are not fit
Thousands of migrants trying to get to other parts of Europe, disgraceful scenes of railway stations, tragic photographs of dead
What more can one say except it's inevitable that Europe can't deal with these crises. Whether or not it's Greece or the Eurozone or the
recession or agriculture or indeed the current crisis with migrants.
Europe was not build as a federal system and that seems to be at the heart of the disputes. Guy Verhofstadt would like to see Europe move
towards more of a federation.
David Cameron believes that's simply not right. And the gist of it is, until Europe makes up its mind once and for all, you're going to have
28 governments, 28 policies, 28 decision makers, and rarely ever reaching a satisfactory result.
And that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope
it's profitable. I'll be back with you on Monday.