Latest / What the Flux / Foxtel's cannibalising itself | Flight Centre's deflating update | PepsiCo, I de-shrunk the chips

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Foxtel's cannibalising itself | Flight Centre's deflating update | PepsiCo, I de-shrunk the chips · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett and I'm Justin and it's Monday, the twenty
• 0:09
  Speaker 2: first of October.
• 0:09
  Speaker 1: Well, jusey boy, it was good news and bad news
• 0:12
  Speaker 1: for Star Entertainment last week. The good news they were
• 0:15
  Speaker 1: able to keep their casino license for now. The bad news, though, well,
• 0:19
  Speaker 1: Star was hit with fifteen million dollars in fines and
• 0:22
  Speaker 1: its license suspension has been extended to early twenty twenty five. Sometimes,
• 0:26
  Speaker 1: jusey boy, you just got to take the good with
• 0:28
  Speaker 1: the bat so true.
• 0:29
  Speaker 2: Flex Out ever listened to the stories on the pod
• 0:31
  Speaker 2: and thought, I'm not to understand the share market just
• 0:33
  Speaker 2: a little bit better. Well, if you're feeling stuck at
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  Speaker 2: the starting line of your investing journey, we have got
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  Speaker 2: a course in the Academy called Understanding the Share Market.
• 0:42
  Speaker 2: Everything from how to buy and sell shares, understanding auto types,
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  Speaker 2: three hundred dollars worth of prizes for those competing. So
• 0:50
  Speaker 2: make sure you download the Flux app and check out
• 0:52
  Speaker 2: the Academy this month.
• 0:53
  Speaker 1: Three spectacular stories today, juzzy boy, let's do it for
• 0:56
  Speaker 1: our first. Foxdell has announced it will start to offer
• 0:59
  Speaker 1: sports content and Sky News Australia on its streaming service Binge.
• 1:04
  Speaker 2: He's Binge stealing Ko's personality here and Flashes So what
• 1:07
  Speaker 2: is going on?
• 1:07
  Speaker 1: Well, juzzy boy, we know. Foxdell is the Australian PATV
• 1:10
  Speaker 1: company that started in nineteen ninety five.
• 1:13
  Speaker 2: Was originally a joint venture between News Corp and Telstra,
• 1:15
  Speaker 2: hence the name Fox from NewsCorp and Tell from Telstra.
• 1:18
  Speaker 2: But once the world started transitioning towards streaming services, Foxtel
• 1:22
  Speaker 2: decided it desperately needed in on the action too.
• 1:24
  Speaker 1: And it went on to launch Binge and Ko and Flash,
• 1:27
  Speaker 1: all offering different content to Foxtel's audience.
• 1:30
  Speaker 2: And now be Man. Foxdal's announced it will be introducing
• 1:32
  Speaker 2: live sports and Sky News Australia to its streaming service
• 1:35
  Speaker 2: Binge for the first time.
• 1:37
  Speaker 1: We're talking Big Bash, cricket, regular AFL and NRL matches,
• 1:40
  Speaker 1: as well as some talk shows.
• 1:42
  Speaker 2: And be Man. That's come because Foxdale's trying to recover
• 1:45
  Speaker 2: from the breakup it's currently having with HBO.
• 1:47
  Speaker 1: Yep, Foxtell needs to remove all HBO shows like House
• 1:50
  Speaker 1: of the Dragon, and the last of us from its platform.
• 1:52
  Speaker 2: Because HBO Max is coming to Australia next year and
• 1:55
  Speaker 2: competing with Foxdale.
• 1:56
  Speaker 1: The Juzzy Boy, It's sounding like this could be a
• 1:57
  Speaker 1: risky move for Foxdell and it could end up cannibalizing
• 2:01
  Speaker 1: its other offerings.
• 2:02
  Speaker 2: Interesting, So what is the key learning here?
• 2:04
  Speaker 1: Product cannibalization is when a new product it's into the
• 2:07
  Speaker 1: sales or market share of an existing product, rather than
• 2:10
  Speaker 1: bringing in new revenue and be man.
• 2:11
  Speaker 2: It tends to happen when a new product is too
• 2:13
  Speaker 2: similar or directly competes with an existing way.
• 2:16
  Speaker 1: Now, while Foxale's og offering was PayTV, Foxel effectively cannibalized
• 2:21
  Speaker 1: its own business when it introduced streaming services.
• 2:23
  Speaker 2: There was Ko, which took the content from Fox Sale's
• 2:26
  Speaker 2: sports channels like Fox Sports, Fox Footy, ESPN. Then Binge
• 2:29
  Speaker 2: came along and took the content from Foxdale's film and
• 2:31
  Speaker 2: entertainment channels. And then there was Flash which took content
• 2:34
  Speaker 2: from Foxdale's news channels like san and Fox News and BBC.
• 2:37
  Speaker 1: And does it boait. According to all reports, this seemed
• 2:39
  Speaker 1: to be an effective move.
• 2:41
  Speaker 2: The streaming services have more than three million subscribers can
• 2:44
  Speaker 2: buy but now be man with Binge Seppi into Ko's
• 2:46
  Speaker 2: sports territory. It kind of looks like Foxdale's got some
• 2:49
  Speaker 2: content overlapp happening on its platforms.
• 2:51
  Speaker 1: Now does boy? Foxdale says there's less than ten percent
• 2:54
  Speaker 1: overlap in the subscribers of Binge and Ko.
• 2:56
  Speaker 2: But I'll tell you what. If it's going to mix
• 2:58
  Speaker 2: content across its streaming services, it's going to have to
• 3:00
  Speaker 2: walk a very fine line to avoid any further cannibalization.
• 3:03
  Speaker 1: For our second story, for light Center has seen its
• 3:06
  Speaker 1: share price drop more than fifteen percent after it warned
• 3:09
  Speaker 1: the market that airfare prices were decreasing.
• 3:11
  Speaker 2: Bit of a vague, ambiguous update from flight Center here,
• 3:14
  Speaker 2: b man, So tell me what's going on. Well, juzzy boy,
• 3:16
  Speaker 2: we know flight Center for its I would say I
• 3:18
  Speaker 2: know it for its irritating jingle and don't forget it's
• 3:20
  Speaker 2: stock video esque travel agent with a big cheesy green
• 3:23
  Speaker 2: at the end of each ad.
• 3:24
  Speaker 1: Now, our flight Center has been around since nineteen eighty four.
• 3:27
  Speaker 1: It had an existential crisis during COVID.
• 3:30
  Speaker 2: Yeah, it was forced to close down the stores, let
• 3:32
  Speaker 2: go of staff, and made a pretext loss of more
• 3:33
  Speaker 2: than three hundred and thirty million bakarunis in FI twenty one.
• 3:36
  Speaker 1: But then it bounce back big time, didn't it, Juzzy boy?
• 3:39
  Speaker 2: It did. Its share price has more than doubled since COVID.
• 3:41
  Speaker 1: But Friday not really a data remember for old flight Center.
• 3:45
  Speaker 2: You see b Man. Flight Center shed an update saying
• 3:47
  Speaker 2: it was performing marginally above the same quarter last year.
• 3:50
  Speaker 1: But there is quote some inconsistency month to month.
• 3:54
  Speaker 2: And worst of all, they couldn't give a guidance for
• 3:56
  Speaker 2: the upcoming year because it was currently too early to
• 3:58
  Speaker 2: draw conclusions. Is a red flag I've ever seen one,
• 4:01
  Speaker 2: and the Man investors agreed with you. Next minute, flight
• 4:04
  Speaker 2: Center share price drop more than seventeen percent.
• 4:06
  Speaker 1: Is that right, Josey boy? Well, I'm over here wondering
• 4:08
  Speaker 1: what is the key learning.
• 4:08
  Speaker 2: When airfair prices start to decrease, the entire travel industry
• 4:12
  Speaker 2: braces for turbulence.
• 4:13
  Speaker 1: Now, airfare prices are a key driver of revenue for
• 4:16
  Speaker 1: travel agencies like flight Center, So.
• 4:18
  Speaker 2: When the company warns of an airflare deflation, investors take note.
• 4:22
  Speaker 1: Tell it to me in a maths equation, Josie Boy.
• 4:24
  Speaker 2: Will be man. Lower airfare prices mean less revenue per
• 4:27
  Speaker 2: transaction for both the airline and the travel agent.
• 4:30
  Speaker 1: And that means companies may need to sell more tickets
• 4:33
  Speaker 1: to maintain the same revenue.
• 4:35
  Speaker 2: Levels they're on top of that the fact that flight
• 4:36
  Speaker 2: center couldn't commit to a guidance and you've got a
• 4:39
  Speaker 2: lot of warrant investors.
• 4:40
  Speaker 1: For our third and final story, PepsiCo has announced it
• 4:44
  Speaker 1: will put more chippies back into its Dorrito bags after
• 4:48
  Speaker 1: consumers have been furious with its shrink flation.
• 4:51
  Speaker 2: No, no, no, love a few more flame and hot
• 4:53
  Speaker 2: Doritos in the bag of cornchysb man, so tell me more.
• 4:56
  Speaker 1: Well, PepsiCo is the enormous food and beverage conglomerate behind
• 4:59
  Speaker 1: you guessed the Pepsi. Yeah, but it's also the company
• 5:01
  Speaker 1: behind brands like Cheetos, Doritos, Lays and Smiths. Don't you
• 5:05
  Speaker 1: dare forget seven Up or Mountain Dew and that weird
• 5:08
  Speaker 1: orange drink Merinda.
• 5:10
  Speaker 2: Can never be made around that. I've been mad. Over
• 5:12
  Speaker 2: the past few years at PepsiCo and other companies have
• 5:14
  Speaker 2: faced some serious backlash over the shrink flation of their products.
• 5:18
  Speaker 1: Now, Josey Boy. Shrink Flation is where the size of
• 5:20
  Speaker 1: a product is reduced but the price remains the same.
• 5:23
  Speaker 2: Sometimes the price even increases. I know.
• 5:25
  Speaker 1: So PepsiCo has announced it will de shrinkify some of
• 5:29
  Speaker 1: its products.
• 5:29
  Speaker 2: We're talking twenty percent more chips for the same price
• 5:33
  Speaker 2: in a standard bag.
• 5:34
  Speaker 1: Talk about a groveling apology if.
• 5:36
  Speaker 2: You don't mind and be man. It makes sense because
• 5:38
  Speaker 2: the size of many of their products have shrunk since
• 5:40
  Speaker 2: twenty twenty.
• 5:41
  Speaker 1: But on top of this, Pepsi's snack and bev prices
• 5:43
  Speaker 1: have jumped forty percent since twenty twenty.
• 5:45
  Speaker 2: So what is the key learning here?
• 5:47
  Speaker 1: Will companies may just see shrink flation as a clever
• 5:50
  Speaker 1: marketing trink, it has a direct impact on consumer trust
• 5:53
  Speaker 1: for the brand a man. When companies reduce the quantity
• 5:56
  Speaker 1: of a product while maintaining or increasing the price, customers
• 5:59
  Speaker 1: often feel very cheat it. Here's a little stat I
• 6:02
  Speaker 1: found Jazzy Boy six ste percent of shoppers switch brands
• 6:04
  Speaker 1: when they notice shrinkflation. That's according to Clarify Capital, and.
• 6:07
  Speaker 2: It actually a noise consumers more than straight up price hikes.
• 6:11
  Speaker 1: And then, according to Choice, the key culprits of shrink
• 6:14
  Speaker 1: flation here in Australia are Jiff's Bathroom Cleaner, MC Committee's
• 6:18
  Speaker 1: biscuits as well as lots of the coal's home brand products.
• 6:21
  Speaker 2: So then it's a good step to PepsiCo is deshrink
• 6:24
  Speaker 2: buying their products. But now we just need to wait
• 6:26
  Speaker 2: for the rest. You'll move coals flock Dan. If you
• 6:28
  Speaker 2: are feeling stuck at the starting line of your investing journey,
• 6:31
  Speaker 2: we have got you because this month's Academy course cuts
• 6:33
  Speaker 2: to all of the clutter. We're talking breaking down habit
• 6:36
  Speaker 2: by shares, decoding risk tolerance, and unlocking all the secrets
• 6:39
  Speaker 2: of ETF. Very excited if you're partnering with Rays this month,
• 6:42
  Speaker 2: nan So fluxdam you're keen to learn more and win prizes,
• 6:45
  Speaker 2: and make sure to download the Flux app and check
• 6:47
  Speaker 2: out the academy this month.
• 6:48
  Speaker 1: Thanks for listening and we'll see you on Wednesday.