Latest / What the Flux / Xero's sticky profit | Burberry cuts 1,700 jobs | HBO is back... again

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Xero's sticky profit | Burberry cuts 1,700 jobs | HBO is back... again · What the Flux

• 0:05
  Speaker 1: This is what the Flux. I'm bred and I'm justin
• 0:07
  Speaker 1: and it's Monday, the nineteenth of May.
• 0:09
  Speaker 2: Does the boy ever had Siri but into your convo
• 0:12
  Speaker 2: like an uninvited guest all the time, then you might
• 0:15
  Speaker 2: be entitled to some cash from Apple. It's part of
• 0:18
  Speaker 2: a ninety five million US dollar settlement from a class
• 0:21
  Speaker 2: action claiming that Series been a bit too nosy. Siria
• 0:25
  Speaker 2: has allegedly been eavesdropping on private chats after accidental activations.
• 0:30
  Speaker 2: But don't go planning your early retirement.
• 0:32
  Speaker 1: Just yeah.
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  Speaker 2: If this money was split between the one point four
• 0:35
  Speaker 2: billion Apple customers globally, we'd be looking at something like
• 0:39
  Speaker 2: seven cents each.
• 0:41
  Speaker 1: Better than nothing. Be man, I'll take it me too.
• 0:43
  Speaker 1: Thinking of getting money back from providers this month in
• 0:46
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• 0:48
  Speaker 1: from your bank, utilities, provider, and lender as well, because
• 0:51
  Speaker 1: let me tell you one thing, fox Am, they are
• 0:53
  Speaker 1: not treating you right and you deserve better. So in
• 0:55
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  Speaker 1: up for yourself and save some serious cash. Make sure
• 1:00
  Speaker 1: to download the Flux app and check out the Academy
• 1:01
  Speaker 1: this month.
• 1:02
  Speaker 2: Three market worthy stories today, Juzzy boy, let's do it
• 1:05
  Speaker 2: for our first. Zero's full year profit jump thirty percent
• 1:09
  Speaker 2: as it grows its user base. But the company uses
• 1:12
  Speaker 2: a simple method to grow.
• 1:13
  Speaker 1: Nothing like payroll and bass statements to get your heart racing. DMan,
• 1:16
  Speaker 1: so more so.
• 1:17
  Speaker 2: Zero with an X is the accounting software that was
• 1:19
  Speaker 2: created in New Zealand in two thousand and six.
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  Speaker 1: One of the oga accounting platforms to launch in the cloud.
• 1:25
  Speaker 2: While the Noyobs and the Quickens of the world were
• 1:27
  Speaker 2: still malfunctioning on scratched CD ROMs.
• 1:31
  Speaker 1: And Zero's grown from a humble New Zealand based company
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  Speaker 1: to a global accounting giant with over four point four
• 1:37
  Speaker 1: million subscribers.
• 1:38
  Speaker 2: And now Zero has trumpeted its revenue for the full
• 1:41
  Speaker 2: year which ended in March.
• 1:42
  Speaker 1: YEP saw its revenue increased by twenty three percent to
• 1:45
  Speaker 1: one point nine billion dollars.
• 1:46
  Speaker 2: But it was Zero's net profit after tax or NPAT
• 1:49
  Speaker 2: that really got investors licking their lips. It was up
• 1:52
  Speaker 2: thirty percent.
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  Speaker 1: And be man, what was their secret source for this?
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  Speaker 2: Well, juzyboy, it was not Ai, and it wasn't a
• 1:57
  Speaker 2: wild acquisition, just good old fashion price hikes.
• 2:01
  Speaker 1: Yep, Zero jacked up the price of their services, which
• 2:03
  Speaker 1: meant the average revenue per user roads by fifteen percent.
• 2:06
  Speaker 2: And despite this, the customer base still grew by six percent.
• 2:10
  Speaker 1: But being maned with its strong and very sticky product,
• 2:13
  Speaker 1: it seems that even its increased pricing isn't holding back
• 2:16
  Speaker 1: customers these days.
• 2:17
  Speaker 2: Oh that's an interesting call, So what's the key learning here?
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  Speaker 1: Product stickiness refers to how likely customers are to keep
• 2:22
  Speaker 1: using a product over time and how difficult it is
• 2:25
  Speaker 1: for them to stop.
• 2:26
  Speaker 2: A sticky product is a product that becomes so embedded
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  Speaker 2: in your life or your business that you are very
• 2:32
  Speaker 2: unlikely to switch away from it.
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  Speaker 1: Even when alternatives exist.
• 2:35
  Speaker 2: All the prices go up, and Jason Boy Accounting software
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  Speaker 2: is one of the stickiest products out there.
• 2:40
  Speaker 1: Once a business is set up on a platform like Zero,
• 2:42
  Speaker 1: switching to a new one is a massive pain in
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  Speaker 1: the backside.
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  Speaker 2: You're going to move over all of your data, retrain staff,
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  Speaker 2: change workflows.
• 2:50
  Speaker 1: And that's why Zero has been able to push through
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  Speaker 1: a fifteen percent price hike and still go with subscriber
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  Speaker 1: base by six percent.
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  Speaker 2: Because most businesses would rather absorb the cost than go
• 2:59
  Speaker 2: through the hassle of switching for.
• 3:01
  Speaker 1: Our second story. Birbery, one of the world's biggest luxury brands,
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  Speaker 1: is planning to cut one fifth of its global workforce
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  Speaker 1: after a seventy five million pound loss. Birbury is making
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  Speaker 1: some brutal wardrobe changes.
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  Speaker 2: Tell me more so.
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  Speaker 1: Birbury's, the British luxury fashion house, was founded in eighteen
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  Speaker 1: fifty six yep. Nearly one hundred and seventy years.
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  Speaker 2: Ago, best known for its trench coats and that beig
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  Speaker 2: check pattern. I understand yep.
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  Speaker 1: Fact man. Well, many luxury brands have moved production off shore.
• 3:29
  Speaker 1: Berbery's trench coats are still made in Castleford at Yorkshire. Wow.
• 3:33
  Speaker 2: That is very insightful, jazy boy. And the past twelve
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  Speaker 2: months have been somewhat challenging for Birbery yep.
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  Speaker 1: Its revenue dropped seventeen percent to two point four to
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  Speaker 1: six billion pounds.
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  Speaker 2: Even worse than that, it went from a two hundred
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  Speaker 2: and seventy million pound profit to a seventy five million
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  Speaker 2: pound net lost.
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  Speaker 1: So now Birbery's pulling out the shears as a plans
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  Speaker 1: to cut seventeen hundred jobs globally.
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  Speaker 2: We're talking nearly a fifth of its workforce, and.
• 3:56
  Speaker 1: After the back of this newsbee Man Birbury shares actually
• 3:58
  Speaker 1: dropped seventeen percent on the day of the announcement.
• 4:01
  Speaker 2: Because luxury brands need to respond to market conditions, So what.
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  Speaker 1: Is the key learning here?
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  Speaker 2: Even prestige brands feel the pinch when consumer sentiment drops.
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  Speaker 1: Yeah, luxury brands often get painted as recession proof, but
• 4:14
  Speaker 1: be Man, let me tell you one thing is not always.
• 4:16
  Speaker 2: The case, and Juzy Boy Burbery is especially feeling the
• 4:19
  Speaker 2: pinch in markets like Chaina.
• 4:20
  Speaker 1: Chinese shoppers account for thirty five to forty percent of
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  Speaker 1: global luxury spending, and.
• 4:25
  Speaker 2: When those shoppers pull back, Burbery really feels it.
• 4:27
  Speaker 1: In fact, be Man, over the last twelve months, Burbery
• 4:30
  Speaker 1: has suffered a fifteen percent fall in Chinese sales.
• 4:33
  Speaker 2: And Joesyboy Berbery is not alone in the fashion trenches.
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  Speaker 1: Nope.
• 4:37
  Speaker 2: Beaucy sales dropped twenty five percent in the most recent quarter,
• 4:40
  Speaker 2: while Saint Laurent experienced a nine percent decrease in sales
• 4:43
  Speaker 2: and Balenciaga saw a seven percent decline.
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  Speaker 1: So be Man. Even if your brand is strong, you
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  Speaker 1: cannot ignore the macro conditions. For our third and final story,
• 4:52
  Speaker 1: Warner Brothers Discovery is backtracking on its Max branding for
• 4:56
  Speaker 1: its streaming service, and HBO is back in the spotlight.
• 5:00
  Speaker 2: Max experiment is over. HBO is back on the billing.
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  Speaker 2: What is the story?
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  Speaker 1: So Man, Warner Brothers Discovery formed after a forty three
• 5:08
  Speaker 1: billion US dollar mega merger in twenty twenty two between
• 5:11
  Speaker 1: Watermedia and Discovery.
• 5:13
  Speaker 2: And in twenty twenty three they ditched the HBO from
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  Speaker 2: HBO Max to create a new broader brand and it
• 5:19
  Speaker 2: went by the name of Max and b Man.
• 5:21
  Speaker 1: At the time, they believe that the HBO brand meant prestige.
• 5:25
  Speaker 2: They wanted to broaden the appeal because it now included
• 5:28
  Speaker 2: lifestyle content from Discovery.
• 5:29
  Speaker 1: The problem was, b Man, nobody asked for this change.
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  Speaker 2: Let's just say it didn't max out in terms of
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  Speaker 2: brand recognition.
• 5:36
  Speaker 1: In fact, it just confused people a lot.
• 5:38
  Speaker 2: So while HBO was out there winning Emmys, Max felt
• 5:41
  Speaker 2: like a vague, distant cousin.
• 5:43
  Speaker 1: So now Warner Brothers Discovery is reversing the decision and
• 5:46
  Speaker 1: it's going back to its streaming name HBO Max. This
• 5:49
  Speaker 1: summer nothing like a bit of corporate backtracking after a
• 5:52
  Speaker 1: major misstep.
• 5:53
  Speaker 2: It's pretty simple. You don't mess with a quality brand
• 5:56
  Speaker 2: name that consumers are familiar with.
• 5:58
  Speaker 1: Aha, So what is the key learning here?
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  Speaker 2: Brand familiarity is more than just recognizing a name. It's
• 6:03
  Speaker 2: a psychological shortcut.
• 6:05
  Speaker 1: When consumers hear the HBO name, they think about premium content.
• 6:09
  Speaker 2: The issue is that the pivot to Max diluted that
• 6:12
  Speaker 2: prestige and made.
• 6:13
  Speaker 1: The Max offering feel a lot more generic and Jazi boy.
• 6:16
  Speaker 2: When you're competing in a crowded streaming market with Netflix
• 6:19
  Speaker 2: and Prime and Disney Plus, you need to have a
• 6:21
  Speaker 2: big differentiator, and.
• 6:23
  Speaker 1: Let's just be honest, Max just wasn't doing it.
• 6:25
  Speaker 2: It doesn't help that Warner Brothers Discovery share price was
• 6:28
  Speaker 2: down fifteen percent since the start of this year either
• 6:30
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• 6:31
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• 6:36
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• 6:43
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• 6:46
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• 6:49
  Speaker 1: To make sure to download the Flux app and check
• 6:51
  Speaker 1: out the Academy this month.
• 6:52
  Speaker 2: Thanks for listening, and we'll see you on Wednesday.