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First Move with Julia Chatterley
Lawyers for the Former President begin His Impeachment Defense; Disney Puts the Soul into the House of Mouse; The U.K. Economy's Worst Year Since the Great Frost of 1709. Aired 9-10a ET
Aired February 12, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:10]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE, and here is your need to know.
Trump's turn. Lawyers for the former President begin his impeachment defense.
Streaming success. Disney puts the soul into the House of Mouse.
And freezing fundamentals. The U.K. economy's worst year since the Great Frost of 1709.
It's Friday. Let's make a move.
Welcome once again to FIRST MOVE, and the end of a truly jam-packed week. Donald Trump's defense begins making their case. All the details on that
coming up as I mentioned.
The Lunar New Year has also arrived in China, of course, too, and we will be talking about the Year of the Ox. From the ox to the chocolate box, it's
Valentine's Day on Sunday. Investors upbeat on love in the time of lockdowns, sending shares of online networking and, yes, dating site,
Bumble soaring on its debut Thursday. A leap, look at that of 63.5 percent, and up again premarket today, too.
Love is in the air generally for recent IPOs. Airbnb is up 49 percent since its debut in December. Food delivery site, DoorDash which went public in
December, too, up almost 50 percent this year so far.
Valentine roses are red, so unfortunately, are U.S. futures. Wall Street consolidating as you can see after hitting fresh records Thursday.
Europe meanwhile, mixed with the U.K. posting some eye-wateringly bad GDP numbers, but reasons for optimism in there too, and we'll take you through
the numbers very shortly as well.
Investors can definitely feel the love tonight/today for Disney. I've mentioned it, up more than one percent premarket after another quarter of
enchanting -- enchanted subscriber growth for its streaming service, Disney Plus helping offset whopping losses in COVID-hit parts of the business like
parks and cruises. We will bring you up to speed on all of that.
For now, the second impeachment trial of Donald Trump is proving far speedier than the first, and for that, we'll turn to our drivers.
We begin in D.C. at the impeachment trial of Donald Trump and it's now over to the defense. Here's Lauren Fox with a full roundup.
(BEGIN VIDEOTAPE)
LAUREN FOX, CNN POLITICS U.S. CONGRESSIONAL REPORTER (voice over): Former President Donald Trump's defense team will have their turn to explain why
they believe he is not responsible for the deadly insurrection at the Capitol.
And despite having 16 hours over the next two days to present their case, Trump's lawyers could make their defense as short as three hours. That's
according to a source close to the former President's legal team.
DAVID SCHOEN, DONALD TRUMP'S DEFENSE ATTORNEY: There's no reason for us to be out there a long time. As I said from the start of this thing, this
trial never should have happened.
FOX (voice over): They will use their time attempting to show no connection between Trump and the January 6th insurrection.
And video examples they say demonstrate Democratic leaders using what they call similar language to the former President.
One possible clip is of Senate Majority Leader Chuck Schumer speaking outside the Supreme Court last March the source close to Trump's team says.
SEN. CHUCK SCHUMER (D-NY): I want to tell you, Gorsuch. I want to tell you, Kavanaugh, you have released the whirlwind and you will pay the price.
FOX (voice over): The argument despite no violence happening after Schumer's speech like it did following Trump's rally on January 6th.
The former President's lawyers also meeting with three Republican senators Thursday night. Even with their roles as jurors, Texas Senator Ted Cruz
says they discussed Trump's defense strategy.
SEN. TED CRUZ (R-TX): I urged the Trump defense lawyers to just focus on the point I just made, which is that the legal standard in all 16 hours of
the House Managers' presentation, they spent only about 15 minutes on the legal standard for incitement, and they created this brand new standard
that's found no criminal code.
FOX (voice over): One Democrat calling the efforts by the group of G.O.P. senators desperate.
SEN. DICK DURBIN (D-IL): They are worried and they should be. These two days, the House Managers have put together a powerful case against this
President.
FOX (voice over): In their final arguments, the House Impeachment Managers urging senators to hold Trump accountable.
REP. JOE NEGUSE (D-CO): We humbly, humbly ask you to convict President Trump for the crime for which he is overwhelmingly guilty of.
If we let it go unanswered, who is to stay it won't happen again?
UNIDENTIFIED MALE: We were invited here.
FOX (voice over): Focusing on how many rioters they say were following the former President's direction that day.
[09:05:11]
REP. DIANA DEGETTE (D-CO): Donald Trump had sent them there. They truly believed that the whole intrusion was at the President's orders and we know
because they said so.
UNIDENTIFIED FEMALE: I thought I was following my President. I thought I was following what we were called to do.
FOX (voice over): Their presentation including a timeline showing how Trump embraced violence even before becoming President, and examples of how
Trump showed no remorse after the attack.
DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES: My speech and my words and my final paragraph, my final sentence and everybody thought it
was totally appropriate.
REP. TED LIEU (D-CA): He knew that people had died, and his message to hold us was that his conduct was totally appropriate.
FOX (voice over): The House Prosecutors sending this warning saying an acquittal for Trump is a dangerous risk.
REP. JAMIE RASKIN (D-MD): President Trump declared his conduct totally appropriate, so he gets back into office and it happens again, we'll have
no one to blame but ourselves.
(END VIDEOTAPE)
CHATTERLEY: As his predecessor's impeachment trial continues there, President Biden announcing the U.S. will have enough COVID-19 vaccines for
300 million people by the end of July.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: We're also able to move up the delivery dates with an additional 200 million vaccines to the end of
July, faster than we expected.
That means we're now on track to have enough supply for 300 million Americans by the end of July.
(END VIDEO CLIP)
CHATTERLEY: CNN senior medical correspondent, Elizabeth Cohen joins us now. Elizabeth, the government ramping up access to supplies for U.S.
citizens and others in this country, assuming we can get the logistics right. Talk us through it.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Right, exactly. So let's walk through these numbers a little bit, Julia.
So what we are hearing is that, a as you said, by the end of July, 300 million doses -- or sorry, 600 million doses. So 600 million doses
delivered by the end of July. Half of that will be Moderna, half will be Pfizer. That's enough to vaccinate 300 million people.
The population is more like 330 million people, but of course, this vaccine not authorized for anyone -- these vaccines not authorized for anyone under
the age of 16. Now, this doesn't take into account the Johnson & Johnson vaccine, which has not been authorized, but it is anticipated that the U.S.
Food and Drug Administration will authorize it.
So chugging along, can't say this effort is speeding along. It is chugging along. The hope is that every American who wants one, will be able to get
one by the end of July -- Julia.
CHATTERLEY: Yes, and your point there about people actually wanting one is another important fact here, which we need to consider.
I want to get your wisdom because I got a lot of correspondence yesterday on what we were talking about, comments from German Chancellor Angela
Merkel saying we have to compare and be concerned about variants perhaps outweighing the good that vaccines are doing.
And I just wanted to get your context on this on the impact of variants on vaccine efficacy on what the vaccine makers are saying to us where their
big concerns are.
COHEN: Right, so there are concerns about some of these variants, not all of them, but there are concerns that some of these variants might be able
to some extent outwit the vaccines.
Let's talk about the U.K. variant first because that seems to be the one that is the most widespread according to the numbers that we have.
The vaccine does seem to work well against that U.K. variant and that is definitely good news; however, the vaccine does not seem to work as well
against the variants that were first spotted in South Africa and Brazil.
So we don't know for sure, but what it appears to be is the vaccine has some efficacy, but it is not going to be 95 percent effective. That's what
Pfizer and Moderna are right now.
So they are not going to be that effective against the South African or Brazil variants, which is why Pfizer and Moderna are working on boosters.
But what I want to give here, Julia, is the bottom line and this is so important.
It is still a very good idea to get vaccinated. If you can get vaccinated, do, and here is why. First of all, most of the coronavirus that's out there
is not the South African variant, it is not the Brazil variant.
Second of all, even if those variants do start to pick up speed and become dominant in certain parts of the world, it appears that the vaccine will
still have some effect against those variants.
The third reason why you still want to get a vaccine is that the more people who are vaccinated, the fewer chances this virus has to spread and
mutate.
Viruses mutate as they spread. If we can stop the spread, you sort of stop mutations in their tracks. You won't get new mutations as much because it's
not spreading as much.
[09:10:10]
COHEN: So for all those reasons, don't worry about the details, get the vaccine if you can.
CHATTERLEY: And therein lies the key. Elizabeth Cohen, thank you so much. I thought it very important for you to emphasize this point once again.
Thank you.
All right, we'll take a look at global vaccination efforts later on in the show with the Secretary General of the International Chamber of Commerce.
Now, let's move on. There's no magic wand for the pandemic impact on Disney's movie and theme parks. Quarterly profit at the House of Mouse
dropping some 99 percent from a year ago, yet, the jewel in the crown, the Disney Plus streaming service added more than 21 million subscribers in the
quarter, now hitting nearly 95 million people.
Frank Pallotta joins us. Frank, great to have you on the show with us. I think, Disney would rather talk to us -- on here, just talk about the
streaming cars of the business and we shall oblige them here.
They basically hit their four-year -- their original four-year target in just 14 months.
FRANK PALLOTTA, CNN MEDIA WRITER: Yes, the difference between how we talk about Disney right now is really important to understanding what Disney is
evolving into.
So for people who don't know, Disney started in 1923. It is a traditional movie studio that became this media conglomerate and now, Wall Street is
treating it and talking about it as a tech company.
Look at the numbers yesterday. The profits were way down, 99 percent. They went from $2.1 billion last year to about $30 million for the last quarter.
That is a huge drop.
If that happened to any other company, the stock price would be on fire. But instead, Disney stock is pretty good. It is actually pretty solid, and
that's all because of Disney Plus.
So we are seeing the transition of Disney as a company from media conglomerate from a movie studio, you know the place where you go see
Mickey Mouse to a tech company. They are treating it like a Silicon Valley tech company in terms of its users and how streaming is getting bigger and
bigger.
CHATTERLEY: Yes. I mean, this is the key, to your point, they are in an evolution to what is going to become and what is a different Disney of the
future where this streaming is such a pivotal part, but we can't escape the fact that they do have monster businesses in theme parks, in the cruise
line business in particular, too, and all of those things impacted.
And as the CEO, the current CEO, Bob Chapek said, it's going to be determined -- the recovery of these are going to be determined by the speed
upon which we can get people vaccinated and get people back to life.
PALLOTTA: Yes, definitely. I mean, he talked a little bit about it, but it is really interesting to see how Wall Street reacts to Disney now. It's
kind of like going to Walt Disney World and saying, hey, Tomorrow Land is on fire, and so is, you know, Adventure Land.
And then Wall Street goes, but you see Cinderella's Castle looks great. Beautiful. The stock price goes up.
So you know, Bob Chapek really is trying to tell investors, just hold the line. Just take some -- like it is going to be a couple more months of us
getting hammered, a couple more quarters potentially, but we are seeing a light at the end of the tunnel.
And he was even kind of talking about potentially in 2022, we might get back to a normal way of life in terms of the parks not having to wear
masks, not having to do social distancing. Obviously, that's a big, big if. And he is not saying that is definitely going to happen, but he's trying to
keep people focused on the future that the business itself will get much better and that streaming will just continue to grow.
So you know, there is hope ahead for Disney, but we'll see if it actually gets there, but that's the case for really everything right now.
CHATTERLEY: Yes, and the sparkly part of the business is soon to be further monetized with price rises, too. The price of Disney Plus in the
U.S. going up of course to $7.99 per month on March 26th. So opportunity continues.
Frank, great to have your insights on that. Frank Pallotta there. Thank you.
All right, 2020 was a bad year for most, but for the U.K. economy, it was the worst in year in centuries.
U.K. GDP shrank 9.9 percent in 2020. That's the biggest slump since the Great Frost of 1709. Anna Stewart joins me now.
Anna, this is not an amusing story, but I can barely get my words out this morning, so I am going to hand it over to you. Take it away, please, and
give us the details.
ANNA STEWART, CNN REPORTER: So we got the quarterly GDP from the last quarter and it was actually better than expected despite, as you said, the
whole year the U.K. economy contracted by nearly 10 percent. That is the worst annual contraction for hundreds of years.
Now the big question, of course, because that's hardly surprising given the pandemic and all the lockdowns, where does it go from here?
Now this quarter isn't expected to go particularly well given the implementation and continuation of national lockdowns here in the U.K., but
the Bank of England does hope or predict some sort of bounce back in the second half.
[09:15:06]
STEWART: In fact, the Chief Economist, Andy Haldane was writing in "The Daily Mail" newspaper just today saying that the U.K. economy is like a
coiled spring, and as the vaccine rollout, he expects that will release the spring.
He predicts lots of pent up appetite, the spending from households, so when those restrictions ease, it will be spend, spend, spend.
But to that push, Julia, I would add a pull, and that is when restrictions do eventually ease here in the U.K., you can expect that furlough scheme to
end, and what could that mean? It could mean a surge in unemployment.
CHATTERLEY: Yes, that's one of the huge challenges, isn't it, Anna? If only COVID as well were the only challenge that the nation is dealing with
here, of course, the fallout from Brexit particularly on the services part of the economy, which was not captured despite all the talk that we had
over agreeing a trade deal with the E.U.
What more can you tell us perhaps about the City of London, the financial sector specifically? Any progress?
STEWART: Absolutely no progress whatsoever, Julia. In fact, some negative news this week. Last month, Amsterdam overtook London as the center for
equity trading. Plenty of trades have been shifting out of the U.K. on to the continent. That is no surprise.
These talks on equivalence don't appear to be going anywhere at all. The Bank of England Governor Andrew Bailey this week said that the eased
demands for the U.K. to adhere to all of their regulations are, and I quote, "unrealistic."
And he pointed out that actually what the E.U. is demanding here is out of line with what they have in terms of equivalence relationships with other
countries like the U.S., like Canada, like Hong Kong and that's quite surprising given that the U.K. just a few weeks ago was considered
equivalent by the E.U.
Now, those I speak to in the City of London aren't surprised that these talks haven't gone anywhere and frankly, financial firms in the U.K. have
been prepared for this scenario now for years.
Since really the referendum began, some staff have already moved to the continent and lots of people point out that world trades are being booked
in Europe, perhaps, they are being booked in places like Amsterdam. It's hard to tell, of course, whether talent behind many of those trades
actually are and many of them could, of course, still be here in the City of London -- Julia.
CHATTERLEY: Anna, great job. Thank you so much for your insights as always. Anna Stewart there from London.
All right, let me bring you up to speed now with some of the other stories making headlines around the world.
The Kremlin's top critic is demanding the Judge in his latest case be replaced because he is not impartial. Alexei Navalny appeared in a Moscow
courtroom again today. He is accused of defaming a World War II veteran, a charge he says is politically motivated.
Last week, Navalny was sentenced to nearly three years in jail for parole violations.
The United Nations says there is growing evidence that Myanmar Security Forces have used live ammunition and lethal force against protesters
calling for the return of civilian rule. It also says more than 350 people have been arrested since the military coup on February 1st.
Protesters turned out for the seventh straight day on Friday.
The Australian Tennis Open will have a lot of empty seats over the weekend. Fans are prohibited from attending the tournament in Melbourne for five
days as the State of Victoria goes into lockdown.
Authorities are trying to slow down an outbreak of a highly contagious coronavirus strain.
Still to come here on FIRST MOVE, is $9.2 trillion the price of vaccine nationalism? We'll be discussing.
And can streaming startup, Mdundo crack the Africa market that is eluded Spotify and Apple? We'll speak to the CEO that's trying. Stay with us.
That's all next.
(COMMERCIAL BREAK)
[09:21:54]
CHATTERLEY: Welcome back to FIRST MOVE live from New York where U.S. stocks are set to pull back from records in early trade.
It's the Year of the Ox in China. It is another week of the bull on Wall Street. All major averages up one percent or more the past five session on
stimulus hope, strong earnings and quickening vaccine rollouts. Small caps are the best gainers, those domestically focused stocks.
But it is not that simple. Vaccine nationalism could cost the world over $9 trillion in lost GDP according to the International Chambers of Commerce.
It says almost half that burden could fall on advanced economies and that the ethics and the economics align in favor of a fair distribution of
doses.
To discuss this, joining us now, John W. H. Denton, he is Secretary General of the International Chamber of Commerce. John, great to have you with us.
Such an important discussion. The moment I saw your research, my eyes lit up, and I had to have this conversation with you. It makes really real
sense to me. This is not an act of generosity. It's helped me to help you and vice versa, all around the world.
JOHN W. H. DENTON, SECRETARY GENERAL, INTERNATIONAL CHAMBER OF COMMERCE: Spot on, Julia, and look, thank you very much for having me on the show,
and Happy Chinese New Year to everyone as well. Let's hope it is a happier one.
Absolutely and reason we got involved with this is that, the I.C.C., we represent 45 million companies in every country around the globe and many
of those countries are obviously least developed and developed middle income economies so that's where lots and lots of businesses are, and they
have been devastated by the impact of COVID-19.
So we have had as a mission to do whatever we could to try and bring an end to this pandemic and ensure that people can get their lives and livelihoods
back together.
The biggest challenge we have seen from the very beginning was the risk that as vaccines started to be developed, we would get the same problem
with vaccine distribution as we got with protective equipment distribution and ventilators in the early days, and we warned governments that they
needed to think through the distribution and logistics because the view we had, the hypothesis we had was that no one is safe until everyone is safe,
all economies are interconnected and we needed to, if you are going to fix your economy, you're going to need to do that in the context of fixing all
the economies.
So that was our hypothesis. We were given affirmations and told by governments, yes, we can fully understand this, and then we were actually
part of creating this group called COVAX which pulls together the developing countries and developed countries to ensure there will be
equitable distribution and they would be getting funding.
And then, we discovered there was no funding or limited funding. And then we worked out -- then we saw it was happening and we were going back to
exactly the same game plan that we saw at the beginning of the pandemic when vaccine nationalism started to take place.
And so we thought it was absolutely essential to be crystal clear that this is actually an economic issue and this is an economic issue that's visited
upon developing economies alone, but actually hits developed economies, and that's why we put together this study which actually proved our hypothesis
that almost 50 percent of the burden, $4.5 trillion of the impact will be felt by developed economies.
And frankly, in the developed economies, again by working men and women, small businesses, people in Main Street, not in Wall Street, that's where
the damage will be done.
[09:25:17]
DENTON: So as you say, the economics and the ethics align and it is time to get these done and there is more because there is more to be done as
well.
CHATTERLEY: I mean, we have to explain this as well. In your more probable scenario, you say, the cost to the blow here could be could be between $1.8
trillion and $3.8 trillion, but the assumption that you're making here and you can correct me if I'm wrong is that developing countries do manage to
vaccinate half their populations by the end of this year, and that's no small feat, quite frankly, John.
But again, to your point, again, around half of the cost is borne by developed economies, and it all comes down to trade links, supply chains
are global.
So if you don't fix problems in countries that you import goods from, it's going to back up and have problems for the nations that import those goods.
DENTON: Yes, let's just unpack that for a little bit. In terms of our more optimistic scenarios, frankly, there were scenarios and they were unlikely
to be met. And that's because the actual speed of distributions of vaccines even in developed countries, you can see in Europe and in the U.S. has been
less than optimal.
And actually, the actual access to vaccinations in developing countries is actually pretty minuscule. What you see of that is about 2.5 million doses.
Two million of those are actually in middle economies coming out of India. Two million coming from India.
There is only about -- this is a number which will be quite shocking -- less than a hundred which have been available right now in the Sub-Saharan
Africa, and that's in Guinea.
And so, the actual speed of distribution is less that be our optimistic scenario, which is why we're moving towards a more pessimistic scenario of
9.2 and as you say, unpacking the supply link is actually critical. This is the bit that's been ignored and people haven't understood.
If you are an auto worker in Detroit putting together a car, all the parts are not made in the U.S. Part of the parts actually have to come from other
economies. So for example tires, the rubber for the tires comes from Thailand.
What's happened is that the rubber plantations have actually been devastated because the workers can't go to them because of lockdowns, and
so you've got these kind of absolute fracturing of that supply chain emerging and a slowdown there in production.
So then you can't sell. You can't make and you can't sell. So that's how that intermediation operates.
And what people often forget is that that is the common denominator of almost every supply chain that operates globally. They all rely on someone
else doing something else. It is all interconnected. We are all joined up.
A solution to this economically is actually joined up solution, a solution to the pandemic must be joined up in order to get it done.
CHATTERLEY: I mean, the perfect illustration we have been talking about on the show is what we have been calling Chipageddon we are hearing from some
of the biggest car makers in the world that they are having to slow production because they simply can't get the chip.
So we're seeing it already in practice here. I mean, that's about changing in demand and obviously demand use for other products as a result of the
pandemic. But it plays into what you're saying here.
John, we have also heard from the Serum Institute of India which illustrates your point about India and he, the CEO there is also incredibly
frustrated about his inability to get vaccines that he has got in storage out to parts of the world. What's the answer, John?
DENTON: Well, it is a combination of things. First of all, our job is not to describe a problem. It is actually to make certain people aware of the
full repercussions and the existing trajectory we're on and sink to a risk there and actually come up with other solutions.
First of all, the first thing is, the vaccine was never going to be a silver bullet. We have got a classic supply/demand problem. This happens
with any major innovation. We know, this is actually kind of like the biggest logistical exercise in living history, if not in the history of the
world.
So getting it right, getting it in balance will take some time, which means, we have got to ensure that we increase supply at the same time as we
manage demand.
And increasing supply, we need to create the environment where more vaccines come online and get distributed. We actually get more production
happening et cetera, but we will say in time, in terms of managing demand, we have got to keep on doing things like testing.
We also have got to ensure that we can use tools that can help manage people back into the economy safely. While the vaccine is starting to
unpack itself across the globe or across the country because not everyone is getting it at the same time. People shouldn't be sitting at home waiting
for three months or four months waiting for a vaccine. They should be able -- and should have tools available to them to actually enable them to get
back out there, which is why testing remains important.
Sadly, we're seeing testing diminishing and focus by -- in a number of governments. You have seen in the U.S. for example, a drop from two million
to 1.8. You know, we don't want that to be a trend.
And also now, we have -- for example, the I.C.C. as again, we create solutions. We actually believe that if you can create an environment where
people have confidence to move around, because they know the status of people in terms of the COVID-19 status, then there is the ability to travel
across borders and travel back to work.
[09:30:27]
DENTON: We are actually running a pilot project at the moment in the town of Gerona which is a pilot to see if we can get a whole economy back
operating using I.C.C. AOKpass which is a digital attestation, which it records your COVID-19 status.
We'll have a football match operating. We'll have winnings. We'll have restaurants and we need to do these things simultaneously because we've got
to increase supply and manage demand and do it safely.
Vaccines were never going to be a silver bullet. We're always going to need to moderate our way through here and we need to use the other tools that
are available. Testing and tools like I.C.C. AOKpass to ensure that we can actually manage the two.
But the other thing that governments have got to recognize is something that I think businesses are so good at making this point. Fixing your own
problem can only be sustainable if you work to fix the whole problem.
CHATTERLEY: Yes.
DENTON: And that's something that we are doing now.
CHATTERLEY: We have to work together. John, fantastic to have you on the show. Thank you so much. John W. H. Denton, Secretary General of the
International Chamber of Commerce with some wise words. Thank you, sir.
We're back after this with the market open.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. Wall Street up and running on the last trading day of the week ahead of the long President's Day Holiday
weekend, and we have got a softer open, a bit of consolidation here, but markets of course, still not far from all-time highs as stocks pull back as
the U.S. 30-year bond yield head towards the psychologically sensitive two percent level.
Higher bond yields of course offer better return and therefore, on a relative basis, can make stocks look slightly less attractive.
[09:35:05]
CHATTERLEY: Bitcoin meanwhile, softer, but still near record highs, too. A crucial week for crypto coming to an end on news that major financial
players like MasterCard are ready to support the use of alternative currencies.
And from Bitcoin to roads and bridges. President Biden yesterday pitching a massive new infrastructure spending proposal. Two senators -- this on top
of the almost $2 trillion emergency aid bill now working its way through Congress. There's a high here of course. More fiscal spending is of course
needed, but the result is more borrowing and higher borrowing costs.
Now, President Biden meets today with airline executives for the first time since taking office. That's according to CNN sources.
The major U.S. carriers are expected to push back on proposals for a COVID- 19 testing requirement for domestic passengers. Pete Muntean joins us with more.
Pete, I have to say as a domestic passenger, I would be happy with the idea of people having tests just for trust and security purposes, but of course,
for the airlines, it might mean a further suppression of already meager demand for plane tickets.
PETE MUNTEAN, CNN CORRESPONDENT: Yes, and that's the rub here, Julia. You know, this is the first such meeting that airlines have had with this new
White House, and they have pushed back vehemently against the idea of expanded travel testing requirements to include domestic travel.
Remember that the C.D.C. began requiring last month that international travelers coming into the United States show proof of a negative
coronavirus test to their airline at the start of their trip.
You know, industry group after industry group, airline after airline has come out against expanding that idea. In fact, Delta's CEO, Ed Bastian said
to CNN just this week that it is a horrible idea, that it's a logistical nightmare and that by discouraging people from travel, it would set airline
recovery back by another year.
What's so interesting thought is that this was really elevated by Transportation Secretary Pete Buttigieg who said that the White House is
talking with the C.D.C. about this and that any decision would be guided by data, he says.
So this is something certain to come up in this meeting with the White House. We will see if it's the death knell for this idea.
CHATTERLEY: Yes, and we shall watch this space. What about the inkling talk of further support, perhaps another multibillion dollar handout to
these airlines in this latest financial aid package that's being discussed, Pete? What do you know and what are you hearing about that?
MUNTEAN: We will have to see if there's appetite for it, Julia. You know, airlines want another $14 billion from the Federal government. That will be
the third round of stimulus funding for the airline industry, and they are already laying the groundwork for the need for this.
American Airlines is going to furlough 13,000 people come the first of April. United airlines, 14,000 people. Remember these were all people
brought back from furloughs that started October 1st. So these are real people on the line, the airlines say and they need this money.
This would keep them out of the breadline and on the job until this October, until October 2021. So it's something really important for a lot
of people and really important for the airlines.
CHATTERLEY: Yes, incredibly important, but there's so many other sectors where people are struggling. We shall see. Pete Muntean, great to have you
with us. Thank you. Live from Washington there.
All right, coming up, after the break, transforming Africa's music scene one track at a time. The cofounder of Mdundo who is taking on the likes of
Spotify and Apple Music joins us next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. An unusual partnership is boosting the music industry in Africa. Danish expat, Martin Nielsen and a Kenyan
rapper called Frasha are behind a web-based music service called Mdundo which means rhythm in Swahili.
Users can download or stream tracks from 80,000 artists for free. There is advertising though, but the revenues are split 50/50 between the artist and
the platform itself.
And I am pleased to say, Martin Nielsen joins us now from Nairobi, Kenya.
Martin, fantastic to have you on the show. You clearly spotted a gap in the market. It is Spotify-esque, but I also see other aspects, Sound Cloud,
odes of that too, so talk me through the concept.
MARTIN NIELSEN, CEO AND COFOUNDER, MDUNDO: Well, yes, thank you very much for having me this morning. The concept of this is rather very simple.
We are basically seeing a continent where the music industry is currently exploding and as you are saying correctly, we are sort of in a gap in
fitting in a music service that is achieving quite similarly to what Spotify achieved in the western world sort of getting people into a music
and legitimate music service and thereby benefitting the right owners.
CHATTERLEY: Which I love. I mean, whose music are you playing here?
NIELSEN: Well, so, we find that the African continent and as a whole as well as many other places in the world are highly consuming their own
music. So 80 percent of all the catalogues that we see being consumed in Africa is African music. Those sort of local or regional, but also
hyperlocal catalogue, and so that's why we have direct agreements with more than 80,000 artists across the continent.
CHATTERLEY: It's fantastic. I mean, I was looking at it. Obviously, there is no subscription. The downloads are free, but you have got these five to
ten-second adverts before each song, and people are happy with that.
I saw a comment that you made and said, legal competitors account for just seven percent of all downloads. Where are the rest coming from here? And
how does this work as a result of those numbers?
NIELSEN: Well -- yes, yes, no, we are having a situation that is very similar to what we saw 10 or 15 years ago in the western world, so it's
kind of very -- you can kind of mirror of the same market at the moment.
But what is sort of happening is that the services, like ourselves have come in and providing a very viable solution for the audience, and just
needs the same trend, just a little bit delayed as what we saw in the western world where basically, the users are moving into -- and customers
are moving into legal services like our own and that's obviously creating a massive foundation for the music industry in Africa as well.
CHATTERLEY: Yes, so it is just the ease upon which you can get access to the music that saves the time. They don't need to download it by other
means, perhaps you can come to a service like this and it works.
NIELSEN: Exactly. Exactly.
CHATTERLEY: Yes. I can understand that. We all want to make things easier for ourselves. How many users have you got and what kind of growth are you
seeing?
NIELSEN: Well, so, our platform right now have seven million users across the continent. That is our latest numbers from December. We are planning to
grow that to 80 million by June 2022.
[09:45:07]
NIELSEN: So we are currently seeing a very rapid growth in user numbers and our catalogue is also expanding rapidly as more and more artists are
seeing this as an opportunity to actually generate revenue from that catalogue.
CHATTERLEY: How long is it going to take you to be profitable?
NIELSEN: So right now, I think similarly to the music services we are seeing across the world, it is very much about growth.
CHATTERLEY: Right.
NIELSEN: And so our focus is a hundred percent to grow across the continent, increase that footprint that we have and growth costs money. So
at the moment, our focus is very much on that.
And in that journey, we are still generating an income for the artist even though the business itself has not turned profitable yet. We are still
positively contributing to many artists that prior to a service like ourselves did not actually have an income of distributing music.
CHATTERLEY: Yes, and I love that about this. You're also contributing to the ecosystem of startups in Africa, and I know you're based in Nairobi
specifically, but I can tell by your accent that you are clearly and were born in Denmark and that's where your accent is from.
Why did you decide to move to the continent of Africa? What was it that attracted you? How does it compare in terms of hiring talent and the people
that are working around you because I think this is another important aspect for our viewers to understand the opportunity there.
NIELSEN: Of course. We are seeing a continent that is very rapidly growing and the main sort of driver that also really caught my attention is that
people are getting -- a massive amount of people are getting phones in their hands.
So we have more than half a billion internet connected smart phones on the continent now, and that transformation in infrastructure and people having
access basically massively increases the market opportunity across the continent.
And we are seeing that from a talent perspective, people are growing with that development. So we are really seeing a continent that is really
optimistic about the development that is taken place.
But I think, more importantly, we are finding that this transformation creates a real market opportunity that also creates value for investors
because a business like ourselves that are heavily focusing on growth, we are depending on the investors of seeing the same potential on the
continent that we are.
And we are really seeing that what has in the past maybe a bit more of the forecast for what would happen on the African continent is now an actual
reality and that is something that the investors are also realizing, which is super, super exciting to be a part of.
CHATTERLEY: It sounds incredibly exciting and it's great to have you on the show, and well-handled there because I believe all the lights went off,
so I am glad that we still --
NIELSEN: All the lights just went off, but I think we managed. I hope you can still see me.
CHATTERLEY: Yes, I can. Good job. You are behaving like a pro there. Great to have you with us and we'll speak to you again soon. Martin Nielsen
there, the CEO of Mdundo. Thank you and great to have you with us.
All right coming up, the BBC goes black in China. The latest tit for between Beijing and London, next.
(COMMERCIAL BREAK)
[09:50:37]
CHATTERLEY: Welcome back to FIRST MOVE. BBC going dark in China. Beijing blocking BBC World News in an apparent retaliatory move after the U.K.
regulator banned Chinese broadcaster, CGTN from airing there.
David Culver joins us now. David, great to have you with us. We have to get the timing straight on this. These events were literally a week apart.
What's that saying? There are no coincidences. But let's take that aside.
What are the Chinese saying is the reason for blocking BBC World?
DAVID CULVER, CNN CORRESPONDENT: Hey there, Julia, good to be with you as well. Yes, reciprocity is what seems to be playing out and that is
something that we have seen between the U.S. and China over the past year plus, now involving the U.K. and particularly the BBC.
So one of the things that the Chinese officials are coming out with is criticism of the type of journalism as they put it, the BBC has been going
forward with. This is the way they word it. I'm going to read it to you here.
They say that "The BBC has infringed the principles of truthfulness and impartiality in journalism." What are they talking about? They are talking
about two stories in particular. One of them has to do with what is a very sensitive issue here and that is with the Uighurs, the ethnic minorities,
the Muslims within Xinjiang, the far western region of China.
The BBC has done extensive reporting on that that has angered Chinese officials, much like CNN's reporting has likewise angered Chinese officials
whenever we broadcast about that.
They also reported on China's handling and response to COVID-19 or allegations of mishandling. That likewise has not gone over well with
Chinese officials.
But as you put it, the timing. It comes a week after Ofcom, the British media regulator decided to withdraw the license for CGTN, that is the state
broadcaster, the Chinese state broadcaster done in English that is broadcasted in several other countries no longer in the U.K.
So here we are, a week later and now the BBC no longer on the air here in Mainland China -- Julia.
CHATTERLEY: Yes, there are no coincidences, but let's talk specifically, David, about what impact this will have? I have been in China a number of
times and I have only ever watched BBC World in international hotels.
How much access is there really to BBC World and is this perhaps more a story of access in Hong Kong?
CULVER: Right, and you're right, it is international hotels and those who will be staying in those hotels that won't have access to BBC World News.
Hong Kong likewise following suit and I think this shows the growing influence that Mainland China has had over Hong Kong especially since we
have seen the National Security Law going into effect in July of last year.
Hong Kong's public broadcaster will likewise no longer be airing BBC content. I think what we also have to look at is the precedence this might
be setting and that could be impacting news gathering on the ground.
So right now, this doesn't affect the BBC journalist who are here, but as we have seen with U.S. journalists, including those of us who work for CNN,
in recent months, we likewise have shortened visas. The Chinese have said this is out of reciprocity, this is what the U.S. did to the state media
journalists in the U.S., so that's why they are acting this way.
As of now, if it continues to then go into the news gathering portion of this and impact those BBC journalists or other British journalists here in
Mainland China, that I think is where it grows increasingly concerning.
CHATTERLEY: Yes, there's never been a more important time to have free flow of information. David, very concerning, and we will continue to watch
this.
In the meantime, I do want to wish you a Happy Lunar New Year. Compare and contrast --
CULVER: Thanks, Julia.
CHATTERLEY: And I admit, it is subdued this year, but compared to where you were last year, I remember your reporting vividly. You were in
quarantine this time last year. So please tell me you're going to do and have something more fun this time around.
CULVER: I think we started the quarantine trend and unfortunately, we were on one of that, because we just left Wuhan, so it was late January and
you're right, we were in a hotel doing quarantine before it was even a policy.
It was our editors out of Hong Kong who said they are going into quarantine. So that's how we celebrated the last Lunar New Year.
This one, fortunately, well, I'm far from family, which is unfortunate, I am close to those who are near and dear here and you know, it is a small
orbit, but at least, they bring fulfilment, so that's how I am spending it.
And of course, with you. I mean, we are getting to chat like most people these days and that is virtually.
[09:55:02]
CHATTERLEY: It doesn't get better than that, spending it with me, and it also is Valentine's Day. Do you want to send a Valentine's Day heart to
your family back home because you are a long way away and they must miss you?
CULVER: That would be great, yes, especially to my mom. I know that she would love to feel that.
CHATTERLEY: There you go. We like that. David, a pleasure as always.
CULVER: Thank, Julia.
CHATTERLEY: David Culver there -- and to your mother.
All right, finally, if you're stuck for a present this Valentine's Day, how about secret recording equipment, spy cameras, or maybe a Morse code
machine. It's all up for auction after a museum closed down here in New York.
Also under the hammer, a half ton stone sculpture of Lenin. It could be worth $7,000.00, but I'm not sure of the shipping costs.
All I can say is diamonds are a girl's best friend.
That's it for this show. Hold the statue.
I'm Julia Chatterley. Have a safe and happy weekend and we will see you on Monday.
And if you're joining us from Asia, Happy Lunar New Year.
We'll see you next week.
(COMMERCIAL BREAK)
[10:00:00]
END
