Forty degree heat is forcing Paris to shut up shop early.
I've worked a long time and I mean we've had hot days in the past, but these consecutive really really hot days and nights are really painful.
It's World Business Report from the BBC World Service.
I'm Leanna Byrne.
As the Louvre and Eiffel Tower cut their opening hours, we'll hear how extreme heat is hitting one of the world's biggest tourism cities.
Also, oil markets flip as the reopening of the Strait of Hormuz sends more supply into the market.
When the US and Israel went to war with Iran, one of the biggest fears for the global economy was oil.
The Strait of Hormuz, one of the world's most important shipping routes for oil and gas, was effectively shut.
This sent prices surging.
We are seeing oil and gas prices jump.
Earlier today, Brent crude was trading at a four-year high of $126.
Oil prices spiking again today after they stabilized on Wednesday.
Price of crude oil has risen above 100 a barrel.
Oil prices fell to a three-month low after the announced tentative deal to end the war with Iran.
Oil prices have continued to fall sharply to their lowest since the war began.
But today, it's a different story.
Since the US-Iran agreement to reopen the waterway, oil cargos that were stuck in the Gulf have started to move again quickly.
Parts of the oil market are now awash with supply and Brent Crude.
The international benchmark has fallen below 75 a barrel for the first time since the war began.
Sarah Emerson is president of the research and forecasting firm ESAI Energy.
Sarah, thanks for joining us.
My pleasure.
So this is quite the turnaround.
Was it expected?
I think to some degree it was expected that if the Strait opened and we actually saw cargoes moving through it yes, that prices would fall.
So who's supplying this oil coming out of the Strait and who's buying it?
Well, the six producers inside the Gulf are supplying it and it's being bought all over the world.
A lot of it flowing primarily to Asia.
Where is China in all of this?
Because it sounds like weaker Chinese demand is a big part of why this oil is not being snapped up.
Obviously, other parts of Asia are taking it, but not China.
Yeah, it's a little bit complicated because China has very substantial inventories, so they don't have to import.
And I think, while their demand is certainly down a bit or flat, flat-ish to down, it's really the fact that they don't need to import.
So they haven't been a draw on the market like they could have been.
I'm going to bring in Susan Schmidt, Portfolio Manager at Exchange Capital Resources in Chicago.
Susan, is cheaper oil, is it just straightforward?
It's just a good news story for markets or is it a bit more complex?
It's a straightforward good news story for markets, I think.
Investors have been anticipating this, optimistic about it.
We've seen oil prices drop more consistently than we've seen the level of confidence in talks between Iran and the United States.
So investors have been ahead on this one, betting that oil would start to flow freely again.
20 million barrels came through in the last 24 hours.
That's resuming normal activity.
And investors are looking at this thinking that now the supply chain will be replenished.
We'll get back on track and we'll see the price pressure ease off of manufacturers and general supplies return to normal levels.
All sounds like good news, but Sarah, could prices get too low?
There's this $50 a barrel figure that people talk about that's often linked to US shale.
Can you explain that to me?
Well, prices are falling.
They're down in the 70s.
Could they get too low?
I think the factor that generally the press or the media has not been talking about is the fact that oil demand is actually quite low right now.
As the crisis hit, a lot of countries cut their consumption.
And so the idea is well, now we're adding all this supply to a market of lean consumption, but actually seasonally it'll rise, plus we'll see recovery.
As the availability of the oil hits markets, then we'll see an increase in demand.
So I don't really think we're heading to the 50s.
I'd be even I can't imagine we could go sustainably into the 60s.
But if we did, I agree with you.
There is definitely some question that shale would have to slow down after had been ramping up rigs.
Yeah, it's interesting.
I wonder what producers even allow that to get to that 50 mark would OPEC kick into gear?
I think OPEC just wants to recoup, recoup losses.
So I think they're happy to just continue producing.
They'll produce as much as they can.
And a lot of people are probably listening right now and saying when am I going to see this at the petrol pump?
When can I fill my car with gas that is cheaper?
Well, I can tell you where I live in the United States, gas is distinctly cheaper than it was a week ago, and certainly than two weeks ago.
I'd say it's fallen probably – well again, we don't have as much tax as Europe, but I would say it's fallen maybe 50 to 60 cents per gallon.
All right.
That is good.
Yeah.
And definitely a lot cheaper than where I am.
All right.
Sarah Emerson, president of the research and forecasting firm ESAI Energy.
Thank you so much for joining us.
Now, Europe is experiencing a deadly record-setting heatwave.
Today, France has recorded its hottest day ever since record began almost 80 years ago.
More than half the country remains under a red heat alert, with tens of thousands of homes in the West without power.
Some tourists have been sharing their experience online.
And today I woke up with a heat rash all over my chest, because it's pretty much impossible to escape the heat here.
Barely anywhere has AC and even if they do, it is not strong like in the US.
You're maybe refreshed for like the first second you walk inside and immediately you're hot again.
It is not cold enough.
If you're visiting Paris during the heat wave, here is what I would do, as someone that refuses to suffer.
7.30 to 10.30, it is bearable outside.
This is when you can get...
Don't get it.
They don't have AC and they're still wearing pants.
Like, how are you not dying?
I don't understand.
This is crazy.
It's 39 degrees Celsius.
Which, by the way, ain't normal in the middle of a city.
There you go, some tourists on TikTok there.
And that severe heat is also affecting Paris.
Authorities have taken steps to protect public health and made the decision to temporarily close some top attractions the Eiffel Tower, Arc de Triomphe, Disneyland and the world's most visited museum, the Louvre.
They are all affected.
And earlier I spoke to Elodie Bertha, a tour guide in Paris.
Well, it's like working in an oven for me, at least.
It's really painful.
Even very early in the morning.
I had a tour of the Cathedral of Notre Dame this morning, which I advanced at 830am.
AM, which is the earliest possible after the eight o'clock mass, hoping that it would be somewhat, a little bit less hot, but sadly it was pretty much the same as during the day actually.
I mean we managed to stay in the shade outside of the cathedral, but still the The air, the temperature was really really hot.
Everybody's dripping with sweat.
We have little fans. to bring some air to our faces.
We have little, we have huts.
And this is new.
I'm seeing people with umbrellas, not for the rain, but for the sun, just to stay in the shade.
I've worked a long time.
And I mean we've had hot days in the past, but these consecutive days really really hot days and nights are really painful.
So a lot of monuments and sites are adjusting, closing early for the art inside, for the clients, the visitors and also for the agents working on site.
For example, I was talking to one of the museums today, which does not have air conditioning.
And the top floor of the museum is so hot they are actually taking some of the art, the art from the walls to bring them in a cooler area, because the art will suffer from the heat in these.
In this sort of events, you have to adjust, so we move our groups or clients, we try to shift things around.
Uh, best we could, we can.
Um, i mean, i know a few churches that are cool-ish, not cold, but it feels cool when you walk in.
So we do pit stops in cool places.
The department stores are cool. the mall.
It's just to cool off for an hour or two and then keep going.
But it's interesting that you're telling me essentially that tourists are still taking tours, that they're not just staying in their hotel rooms that could have air conditioning.
I'm guessing that some maybe are or maybe have cut their trip short and left.
But those I don't see, so I don't realize.
But the clients that are on my...
In my booking, they are still here.
This morning's clients.
Sadly, they had just received the news that their evening reservation at Eiffel Tower was canceled due to the early closing of the Eiffel Tower.
So they were hoping to postpone to tomorrow, but sadly, it will be the same tomorrow.
We just heard that it will be the same.
So they'll get their money back, but sadly it's the end of their trip, so they will miss the Eiffel Tower.
I'm guessing it's not much fun for all the bars and restaurants that at this time of year, have these big terraces where they can have a lot of clients at the same time.
And now people are looking for places with no terrace, with an enclosed area with air conditioning.
It's very different to what you expect to do in Paris.
Yes, absolutely.
This is really not common.
And I'm guessing it's not good for a lot of businesses.
The reality is, Elodie, that climate change, it's not going anywhere.
We have to think for the future.
What do you think about your business and your future when a few ways are going to become more common?
True, true.
And in fact, this is only, I mean, we're just... the end of June.
We still have July and August.
And so we expect that maybe two or three weeks from now, it starts again.
It's very likely.
And if it's not this year, it will be next year and the year after and so on.
So at this time, we're still a little... taken aback with this because it's quite unusual.
We're still surprised and shocked, I want to say.
That was Elodie Berta, a tour guide in Paris.
And you're listening to World Business Report from the BBC World Service.
Now, if you're learning a new language, you've probably heard this.
That's the sound you get when you've answered correctly on Duolingo, the language learning app used by millions around the world.
I've been speaking to its founder, Louis van Aan, for today's Business Daily.
He told me how growing up in Guatemala inspired his mission to make education accessible and why he says a controversial AI memo was not made clear.
We have adopted every technology that has come out and we have adopted it if it can help our users.
And so internally, this was not controversial at all.
But I think people misunderstood because I was not very clear.
People misunderstood this, as oh Duolingo is firing all its employees in exchange for AI, And you can listen to the full Business Daily at bbccom or wherever you get your podcasts.
Now Micron Technology, the largest US maker of computer memory chips, has beat its third quarter estimates and it's more than quadrupled its year-on-year revenues.
Susan Schmidt, I hope you're still there.
Good forecasts for Micron for the next quarter too.
Its share price has gone up.
So have these earnings turned investors back on AI, on chip makers and tech stocks more generally?
Well, they've certainly comforted investors.
Micron has been the name to watch.
Investors were really anticipating their earnings report this afternoon.
And Micron in many ways has replaced Nvidia as the stock to watch the company whose earnings we're most interested in at the moment.
Micron produces memory chips.
We've talked about NVIDIA with graphic processing units, GPUs that do all the AI computing, but as AI learns, it needs a place to store the knowledge.
Those memory chips come in with producers like Micron who manufacture them.
The market was really waiting to see how that demand is holding up, particularly over tenuous thoughts earlier in the week.
And Micron delivered.
So as you said, up 350% year on year.
For the guide, it's $50 billion in sales.
Truly incredible numbers, north of 80% margins.
Investors are going to be very positive on this.
Another fun one for you.
I see Wendy's is getting bump on the markets because it's a meme stock, essentially.
Can you remind us what that is?
And is this a good thing for the company?
So Wendy's, it's a tough thing to be a meme stock these days because there's so much volatility in your share price.
And I don't think that's necessarily a good thing for management other than a big distraction.
The share price up 46% today.
It's strictly because retail and social media has allowed retail buyers to congregate and put pressure on different constituents owning those shares.
And so they've... if you would, ganged up on the short sellers.
Those are people who don't own the stock but have sold it in advance and they've pushed the price up, forcing the short sellers then to come in and buy the stock and increase the stock price further.
So it becomes a game.
It works very well with these stocks that are heavily shorted because of concern about future business and where there's a lot of retail buyers and not a lot of shares available to buy.
All right, Susan Schmidt, thank you so much.
Now the creator economy is one of the fastest growing parts of the digital economy.
Goldman Sachs estimates it could be worth almost half a trillion dollars globally by 2027.
And more than 300,000 creators now earn more money through Patreon every month.
The platform lets podcasters musicians, writers and video makers ask fans to pay directly for their work.
But as AI transforms the internet and algorithms continue to dictate who gets discovered online, how sustainable is that model?
I've been speaking to Patreon's chief operating officer, Paige Fitzgerald, and Maid Boothia and November Kelly, hosts of the podcast Trash Future.
Page told me the internet has become too dominated by algorithms chasing watch time clicks and viral hits.
Today's social media platforms are built around virality.
They are funded by advertising dollars.
So the algorithms that power their social media feeds prioritize watch time.
Additional watch time leads to additional eyeballs, which leads to additional advertising revenue.
What we are trying to do, what we are doing at Patreon, is building a better, more creative corner of the Internet, intentionally prioritizing long-term relationships between creators and fans, even as we help creators expand their reach and reach new fans.
Well, on that, I'm going to bring in Nate November, who are creators who earn money through Patreon.
So you both present a podcast called Trash Future, which is about tech finance, sort of the general ruin that it feels like we're all going through right now.
From a left-wing comedy angle, we have free episodes that everyone can listen to, and then we have a bonus feed that people pay to listen to.
If algorithms are problematic, shall we say, do you think creators, they're still quite dependent on them?
Even if you have an established platform, you're still dependent, I think, to market it, to share it, to get more people interested.
You have to kind of correspond in some way to whatever is going to allow it to be shared and not sort of downranked.
Do you think Patreon?
It's only possible because TikTok Instagram YouTube, they've already done the hard work of building that audience for people.
That is exactly why we have built Discovery on our platform is to enable creators not just to deepen their relationships with their fans and monetize those fans.
So earn a sustainable income by directly connecting with those fans, but also to reach new audiences so that they don't need to rely as much on platforms like Instagram and TikTok.
Nate November, how do you monetize?
How much do you charge?
Has that ever changed?
I do now five different podcasts, all of which are monetized through Patreon.
And it's a full time job for me.
We have expanded it for additional content.
If people want to, you know, sort of like shows within shows and additional programs and other kind of Features like newsletters, question and answer sessions, things along those lines.
We allow people to access that by subscribing to a higher tier.
We haven't had any issues with keeping the price the same.
The goal is just to you know content people like and hopefully, either through some algorithmic upranking or word of mouth, that more people will encounter it and want to subscribe.
And it also means you don't have to do ads.
That's correct.
And I think that would really be sort of fatal to our brand as well if we had to think about what sponsors might like or not like.
Paige, let's talk about AI because it makes it easier to create content, right?
AI does make it much easier for creators to produce media, lowers the barrier for entry.
And we have heard from creators that they are amazed at the capabilities that it provides, both in terms of expanding how they create but also automating aspects of running their business that had previously presented manual overhead in the past.
Jack Conte, our CEO, released a video on Patreon in March where he talks about just this.
But also furious that AI has not evolved.
Compensated creators for their work.
We are on the forefront of ensuring that we fix this.
We figure out a way for creators to get compensated for models that train on their work, as well as get credit when their work is used for training purposes, and that creators have an opportunity to provide consent, opt in or opt out.
We are not worried that AI slop will proliferate on our platform.
And we also have robust controls in place to ensure that our platform remains safe on an ongoing basis.
Yeah, just to tease that out, essentially.
So some creators have argued and have witnessed that AI is using their content to train, or they've seen it somewhere else in some other way.
We have prevented media on our platform from being used for AI training purposes since 2023, starting with open AI and expanding to additional AI companies.
So, no, we do not allow AI models to train on creative work on Patreon.
November, what do you guys feel about that?
Do you use AI in your job and are you worried about it?
Absolutely not in terms of using it.
And I think there are a few reasons why.
I have a very simple model of humour, which is just that you create an expectation and then you subvert that expectation.
And one of the things that I found is there was this sort of period of evolution, which AI has now reached, where it's too unpredictable to be useful, but it's too predictable to be funny.
I think there's also this feeling that because of these ethical concerns, because it uses stolen data and because, more than that, all of that data is going to small handful of companies with some very strange kind of utopian visions of the future, that we would be against using it on a sort of moral basis.
I think our fans would be disappointed if we ever did.
And more than that, I just think that it doesn't work very well.
Paige, I just want to ask you about subscriptions.
People talk about subscription fatigue.
You've already got people paying for Netflix, Spotify, Disney.
How much room is left?
Patreon has evolved into so much more than a subscription platform.
You are right that that is how we started.
But today on Patreon, we have one time payments.
We have the ability for creators to engage their audience through vibrant community events environments.
While we have 25 million paid memberships on our platform, we have 165 million free memberships on our platform.
Patreon takes a percentage of the creator income.
Would you ever be worried that they build a level of communication or rapport with their subscribers that they say I don't need Patreon anymore?
As fans go through what we call the fan engagement funnel, which means get introduced to a creator, explore the creator's media, deepen their connection to the creator, start engaging with other fans of that creator.
Then they become more willing to pay.
That was Patreon's Chief Operating Officer, Paige Fitzgerald, finishing that conversation.
Finally, one of the biggest gaming launches in the world is starting before the game is even out.
Pre-orders for Grand Theft Auto 6 are opening around the world from midnight local time.
I'm here for Lucia Camino's.
She's supposed to be getting out.
I've seen you here before.
You might have.
There you go.
But the game itself will not be released until November.
The standard edition will cost $79.99 in the US with a premium version at $99.99.
But fans have noticed something else too.
The so-called physical edition will not actually contain a disc.
Instead, buyers will get a box with a digital download code instead.
Vic Hood is a freelance journalist who's covering this.
Vic, hello.
Thanks for joining us.
Hi, Leanne.
Thanks for having me.
Well, get me up to speed here.
Why would you be doing such a huge launch for pre-orders?
So pre-orders are quite common now for big launches like this, for what we call AAA launches.
So your call of duties and that sort of thing.
And it...
Typically, it sort of started as a way for people to secure their orders back in sort of the days where you would only be able to get physical launches, where you'd have to queue up at midnight to make sure that you got your copy.
And now it's just sort of a case of, I guess, peace of mind, but also allows the companies to sort of prepare and know just how much interest there actually is.
And there's a lot of interest in this.
Yeah, clearly.
And GTA 5 came out back in 2013 and it went on to make billions.
So how much expectation is sitting on this one?
There's a huge amount of expectations.
So like you said, GTA was massive.
Just to put in perspective how massive, it's the most profitable commercial media product, not video game, in history.
So if...
Avatar is the highest grossing film of all time at £2.9 billion.
GTA V and its online counterpart have grossed between £8 and £10 billion.
So it's, sorry, Avatar was 2.9 billion and it was 8 to 10 billion.
So that's several times over.
It's absolutely massive.
So the expectation on this is huge, which is why they've been able to, you know, keep people stewing for 13 years to increase the hype.
But it also means that for them, That expectation creates a very difficult bar to meet.
But they've always been known to sort of take the time to perfect their product.
And that's sort of what we're hoping for here.
Well, Yvette, the price is quite interesting.
$80 for the standard edition.
Is that expensive by gaming standards?
So the average game now is about 60 to 70.
70 being sort of, again, those AAA, your Call of Duty, your games from big studios.
So $80, we haven't seen...
Very much before.
The only game that has done it somewhat successfully was Nintendo, when they released Mario Kart World alongside their Switch 2 last year.
And Microsoft tried to do it previously and then rolled back because there was such...
It seems to have gone down quite well this time, because people were expecting this game to cost around 100 and that probably they could have charged that because the interest is so high.
But it will probably push the industry further, maybe about 10, 20 more, and pee of the way for other big studios to start charging that little bit more for their games.
So essentially it's setting a news price standard for these blockbusters games, especially if it's taken them 13 years to get here.
Yeah, absolutely.
And the parent company of Rockstar Games, who develops this, They've done this before.
They did it with NBA 2K21, the basketball game, where they set that 70 standard that we now use, and everyone followed suit.
So it's likely that that will happen again sort of this time.
Vic, have you pre-ordered?
I haven't yet.
Our pre-orders go live at midnight in the UK time.
So we're not quite there yet.
Not quite there yet, but we're not too far off.
A couple more minutes to go.
Vic Hood, freelance journalist.
Thank you so much for joining us and giving us all the up to speed on GTA.
And that is it from World Business Report from the BBC World Service.
I'm Leanna Byrne.
Thanks so much for listening.
