Latest / What the Flux / CommBank strikes at the core | Netflix wants you to start playing | Foxtel-owner's billion dollar loss

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CommBank strikes at the core | Netflix wants you to start playing | Foxtel-owner's billion dollar loss · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett justin Monday, the thirteenth of October, Juzzy boy.
• 0:10
  Speaker 1: Australia's national property market has increased by six point two
• 0:13
  Speaker 1: percent annually, and when the RBA Governor was asked whether
• 0:16
  Speaker 1: the RBA cash rate was responsible, she was very quick
• 0:20
  Speaker 1: to shut this down. According to her, it's not cheaper
• 0:22
  Speaker 1: money driving prices up. It's good old fashioned supply and
• 0:26
  Speaker 1: demand economics.
• 0:27
  Speaker 2: One O, one B, manypos am. With Halloween coming up
• 0:29
  Speaker 2: in the next couple of weeks, we've gotten into the
• 0:32
  Speaker 2: spirit of Flex as well, busting three spooky money viars.
• 0:35
  Speaker 2: Make sure to check out the Flux app and our
• 0:37
  Speaker 2: latest article.
• 0:38
  Speaker 1: Three Big Stories Today, Juzzy boy, let's do it for
• 0:41
  Speaker 1: our first. Combank has officially ditched old school servers and
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  Speaker 1: have shifted their core banking system into Amazon Web Services
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  Speaker 1: data centers.
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  Speaker 2: Com Bank getting old techie on us hereb man, So
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  Speaker 2: what is going on here?
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  Speaker 1: Well? Combank, aka the Big Yellow of Australia, was founded
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  Speaker 1: in nineteen eleven and.
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  Speaker 2: With its more than seventeen million customers, it's become the
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  Speaker 2: largest public company on the ASX by marketcap.
• 1:03
  Speaker 1: We're talking a market cap of more than two hundred
• 1:05
  Speaker 1: and eighty billion dollars.
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  Speaker 2: Wow, now, Beman for some context. While you're twiddling your
• 1:09
  Speaker 2: thumbs on your banking app sending a payment to a friend,
• 1:11
  Speaker 2: that payment needs to be processed somewhere, somehow.
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  Speaker 1: And traditionally the big banks have relied on their own
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  Speaker 1: in house servers to process these sorts of transaction, you know, clunky.
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  Speaker 2: Physical servers sit in freezing rooms with air cons to
• 1:24
  Speaker 2: control their heat.
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  Speaker 1: But now CBA has locked the door and tossed out
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  Speaker 1: the key to these dusty old server rooms.
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  Speaker 2: Yep, it's moved its core systems into the cloud and
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  Speaker 2: announced a cushy new partnership with Amazon Web Services and
• 1:35
  Speaker 2: use boy.
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  Speaker 1: It's not the first Australian bank to go cloud hopping.
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  Speaker 2: Nope. Mcquaribank moved its core banking system into the cloud
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  Speaker 2: in twenty twenty one.
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  Speaker 1: But the other Big four banks they are trying desperately
• 1:45
  Speaker 1: to make the move.
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  Speaker 2: So what is the key learning here?
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  Speaker 1: The banks that adopt new technology early often gain an
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  Speaker 1: edge that compounds over time.
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  Speaker 2: You see, be Man. When a bank modernizes its systems
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  Speaker 2: before everyone else, it wins.
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  Speaker 1: Twice, first with customers and then with investors.
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  Speaker 2: Yeah. Let's take McQuary for example. They were the first
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  Speaker 2: big bank to transition to the cloud in twenty twenty one.
• 2:04
  Speaker 1: Yep, it'sween growing its mortgage market share rapidly, largely because
• 2:07
  Speaker 1: of its ability to quickly approve loan application.
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  Speaker 2: In fact, a Man mccrary's mortgage book grew at a
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  Speaker 2: rate of three point eight times the average of the
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  Speaker 2: banking system in August this year.
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  Speaker 1: On the other hand, A Z has spent about six
• 2:18
  Speaker 1: years and approximately two billion dollars trying to build A
• 2:21
  Speaker 1: and Z plus with.
• 2:22
  Speaker 2: The goal for that to be their core banking system,
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  Speaker 2: but still no success.
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  Speaker 1: So jusey boy. After the mcquarie success, CommBank will be
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  Speaker 1: hoping it's big migration to cloud might help it save
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  Speaker 1: some costs, but.
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  Speaker 2: More importantly help a grow market share against its slower
• 2:35
  Speaker 2: moving competitors.
• 2:36
  Speaker 1: For our second story, Netflix has announced new games within
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  Speaker 1: your TV because apparently you weren't watching enough already.
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  Speaker 2: I'm more polertic games from our childhood getting a tech upgrade,
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  Speaker 2: so tell me more. So.
• 2:47
  Speaker 1: Netflix is still the undisputed world champ of the streaming wars.
• 2:51
  Speaker 2: We're talking bridget in the Monster series Wednesday.
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  Speaker 1: And over three hundred million paid members a man.
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  Speaker 2: You may remember that Netflix has been talking about gaming
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  Speaker 2: ambition since twenty twenty one, but now they have made
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  Speaker 2: their biggest move so far.
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  Speaker 1: As of last week, Netflix subscribers can play games directly
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  Speaker 1: on their smart TVs using your phone as a controller.
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  Speaker 1: So what games are we talking here?
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  Speaker 2: All the old school board games you used to play
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  Speaker 2: with your family and friends, A lot of nostalgia.
• 3:16
  Speaker 1: Like Boggle, Pictionary, Tetris, but also Lego party game.
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  Speaker 2: And notice how these are all group focus games. I
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  Speaker 2: did notice that part of Netflix's plan to encourage more
• 3:26
  Speaker 2: customers to participate.
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  Speaker 1: The goal is to keep us glued to Netflix even
• 3:30
  Speaker 1: when we're not binging another true crime doco.
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  Speaker 2: So true? So what is the key learning here?
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  Speaker 1: In the attention economy? Whoever owns your couch time wins?
• 3:39
  Speaker 2: Yeah, we know that Netflix already has millions of subscribers
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  Speaker 2: who spend significant screen time watching content.
• 3:44
  Speaker 1: In fact, according to Netflix's latest earnings, the average paid
• 3:47
  Speaker 1: subscribers spends about two hours a day watching shows on
• 3:50
  Speaker 1: the Flix.
• 3:51
  Speaker 2: That's roughly fourteen hours a week devoted to the Netflix content.
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  Speaker 1: But to grow that engagement further, it needs more sticky experiences.
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  Speaker 2: And games offer a clear half forward for Netflix.
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  Speaker 1: That means every extra hour people choose to play compared
• 4:04
  Speaker 1: to switch apps is an hour Netflix.
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  Speaker 2: Retains and can monetize too.
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  Speaker 1: Yep. Consumer spend one hundred and forty billion dollars a
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  Speaker 1: year on gaming and that excludes.
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  Speaker 2: The Russian and Chinese markets as well as advertising in
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  Speaker 2: the games.
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  Speaker 1: So this is Netflix's play to start earning a percentage
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  Speaker 1: of that market over time.
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  Speaker 2: And b man, you'd be a brave person to bet
• 4:22
  Speaker 2: against the Flix.
• 4:23
  Speaker 1: For our third and final story, Dezone, the sports streaming
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  Speaker 1: platform and Foxtel's new owner, has made a US nine
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  Speaker 1: hundred and thirty six million dollar loss in twenty twenty four.
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  Speaker 2: Nothing like a company that celebrates losing slightly less money
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  Speaker 2: this year, so tell me more so.
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  Speaker 1: Dezone, spelled daz n was founded in twenty fifteen and
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  Speaker 1: has ambitions to become the Spotify of sport.
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  Speaker 2: Yeah, it's a global sports streaming service owned by Access Industries,
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  Speaker 2: which is a private investment group owned by Len Blavatnik
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  Speaker 2: and Jasyboy.
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  Speaker 1: De Zone has made quite the splash in Australia recently
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  Speaker 1: after acquiring Foxtel for two point two billion dollars the man.
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  Speaker 2: It ain't just Foxtel. De Zone also owns broadcast rights
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  Speaker 2: to the Bundesliga and LaLiga Soccer.
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  Speaker 1: Also Boxing MMA, the NFL internationally.
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  Speaker 2: Now, the good news for de Zone is that it's
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  Speaker 2: revenue climb to three point two billion US dollars in
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  Speaker 2: twenty twenty four.
• 5:14
  Speaker 1: All right, hit me with some bad news, juzzy boy.
• 5:16
  Speaker 2: Well, despite that revenue, the Zone still made a nine
• 5:19
  Speaker 2: hundred and thirty six million US dollar loss for the year.
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  Speaker 1: Which is actually a better performance than it's a one
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  Speaker 1: point four billion dollar loss the year before.
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  Speaker 2: So to keep the lights on, the Zone had to
• 5:28
  Speaker 2: call in a billion dollars from Saudi Arabia's sovereign Wealth Fund.
• 5:32
  Speaker 1: And don't forget five hundred and eighty seven million dollars
• 5:34
  Speaker 1: from Access Industries.
• 5:35
  Speaker 2: But do Zone CEO reckons twenty twenty six is its
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  Speaker 2: year as it pushes towards profitability.
• 5:40
  Speaker 1: Big talk for a team still deep in the red zone.
• 5:43
  Speaker 2: So what is the key leading here?
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  Speaker 1: The path to profitability is the journey a company takes
• 5:48
  Speaker 1: from operating at a loss to generating consistent net income.
• 5:51
  Speaker 2: Yeah, for high growth companies, early losses are often a
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  Speaker 2: bit part of the plan.
• 5:55
  Speaker 1: It's the price of building technology or buying rights attracting
• 5:59
  Speaker 1: millions of customers.
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  Speaker 2: But for these high growth companies, the key is also
• 6:03
  Speaker 2: showing a clear path towards profitability.
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  Speaker 1: Or else investors can feel like they're investing good money
• 6:08
  Speaker 1: after bad and ultimately just lose hope.
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  Speaker 2: That's not to say it is impossible to hit profitability
• 6:13
  Speaker 2: after many years be man. Take Amazon for example, uh huh.
• 6:16
  Speaker 1: It spent nearly nine years focused purely on growth before
• 6:19
  Speaker 1: turning its very first annual profit in two thousand and three.
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  Speaker 2: And ubertook even longer. They reported their first operating profit
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  Speaker 2: fourteen years after launching.
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  Speaker 1: So Juzzy boy, If de Zone wants to become the
• 6:29
  Speaker 1: quote Spotify of sport, it needs to start showing can
• 6:32
  Speaker 1: actually become a sustainable business.
• 6:34
  Speaker 2: But dam there is so much information on social media
• 6:36
  Speaker 2: it's not easy to tell that's from friction. So if
• 6:40
  Speaker 2: this season of trick or trading, we're going to bust
• 6:42
  Speaker 2: three spooky money bits people easily get fooled by. Do
• 6:45
  Speaker 2: you want to see what those spooky money bits are?
• 6:47
  Speaker 2: They shut it, Download the Flux app and check out
• 6:49
  Speaker 2: our latest startingle.
• 6:50
  Speaker 1: Thanks for listening, and we'll see you on Wednesday.