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Speaker 1: This is what the flax. I'm Brett and I'm Justin

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Speaker 1: and it's Friday, the nineteenth of December. In this recap episode,

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Speaker 1: we're breaking down the biggest streaming stories of twenty twenty five.

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Speaker 1: Twenty twenty five was a turning point for streaming. It

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Speaker 1: was about big deals, ownership shakeups and platforms that are

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Speaker 1: picking new sides. So let's take a recap of the

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Speaker 1: three biggest streaming stories of twenty twenty five in Australia

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Speaker 1: and around the world.

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Speaker 2: Three massive stories today, Juzzy boy let's do it for

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Speaker 2: our first. Dezone, the sports streaming platform and Foxtel's new owner,

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Speaker 2: has made a US nine hundred and thirty six million

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Speaker 2: dollar loss in twenty twenty four.

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Speaker 1: Nothing like a company that celebrates losing slightly less money

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Speaker 1: this year, so tell.

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Speaker 2: Me more so. De Zone spelled da z N was

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Speaker 2: founded in twenty fifteen and has ambitions to become the

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Speaker 2: Spotify of sport.

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Speaker 1: Yeah. It's a global sports streaming service owned by Access Industries,

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Speaker 1: which is a private investment group owned by Len Blavatnik

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Speaker 1: and Jasey Boyd.

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Speaker 2: The Zone has made quite the splash in Australia recently

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Speaker 2: after acquiring Foxtel for two point two billion dollars.

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Speaker 1: But then, man, it ain't just Foxtel. De Zone also

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Speaker 1: owns broadcast rights to the Bundesliga and LaLiga Soccer.

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Speaker 2: Also Boxing MMA, the NFL internationally.

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Speaker 1: Now, the good news for de Zone is that it's

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Speaker 1: revenue climb to three point two billion US dollars in

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Speaker 1: twenty twenty four.

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Speaker 2: All right, hit me with some bad news, juzzy boy.

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Speaker 1: Well, despite that revenue, the Zone still made a nine

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Speaker 1: hundred and thirty six million US dollar loss for the year,

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Speaker 1: which is actually.

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Speaker 2: A better performance than it's a one point four billion

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Speaker 2: dollar loss the year before.

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Speaker 1: So to keep the lights on, do Zone had to

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Speaker 1: call in a billion dollars from Saudi Arabia's sovereign wealth.

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Speaker 2: Fun and don't forget five hundred and eighty seven million

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Speaker 2: dollars from Access Industries.

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Speaker 1: But do Zone CEO reckons twenty twenty six is its

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Speaker 1: year as it pushes towards profitability.

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Speaker 2: Big talk for a team still deep in the red zone.

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Speaker 1: So what is the key leading here?

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Speaker 2: The path to profitability is the journey a company takes

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Speaker 2: from operating at a loss to generating consistent net income.

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Speaker 1: Yeah, For high growth companies, early life are often a

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Speaker 1: bit part of the plan.

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Speaker 2: It's the price of building technology or buying rights attracting

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Speaker 2: millions of customers.

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Speaker 1: But for these high growth companies, the key is also

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Speaker 1: showing a clear path towards profitability.

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Speaker 2: Or else investors can feel like they're investing good money

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Speaker 2: after bad and ultimately just lose hope.

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Speaker 1: That's not to say it is impossible to hit profitability

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Speaker 1: after many years be man. Take Amazon for example, uh huh.

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Speaker 2: It's spent nearly nine years focused purely on growth before

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Speaker 2: turning its very first annual profit in two thousand and three, and.

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Speaker 1: Ubertook even longer. They reported their first operating profit fourteen

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Speaker 1: years after launching.

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Speaker 2: So Juzzy Boy. If de Zone wants to become the

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Speaker 2: quote Spotify of sport, it needs to start showing can

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Speaker 2: actually become a sustainable business.

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Speaker 1: For our second story, YouTube has smashed viewership records and

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Speaker 1: ad revenue as it competes head on with old school

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Speaker 1: TV channels.

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Speaker 2: YouTube's come a long way since Charlie bit my finger.

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Speaker 2: So tell me more, okay? So YouTube is owned by Alphabet,

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Speaker 2: which also owns Google, Google Cloud, Android, bit Bit, Gemini

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Speaker 2: Way mow and plenty more and the man.

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Speaker 1: Google bought YouTube back in two thousand and six for

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Speaker 1: just one point sixty five billion US dollars.

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Speaker 2: And now YouTube is making nearly eight times that amount

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Speaker 2: in advertising revenue each and every year.

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Speaker 1: That's right, YouTube's ad revenue jumped to nine point eight

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Speaker 1: billion US dollars in the past year, which was up

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Speaker 1: thirteen percent.

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Speaker 2: But even scarier than that, Juzzy Boy, is that YouTube

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Speaker 2: isn't just an online video streaming platform anymore.

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Speaker 1: It's considered more of a fully fledged TV network because

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Speaker 1: of its ability to be connected to your TV.

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Speaker 2: In fact, YouTube now accounts for twelve point eight percent

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Speaker 2: of all TV viewership.

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Speaker 1: That's the high share any platform has ever hit, according

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Speaker 1: to Nielsen and Juzzy Wait, this is just another reminder

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Speaker 1: of how connected TV has crushed old school TV networks

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Speaker 1: and will probably continue to do so a RIP network

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Speaker 1: ten So what is the key learning here?

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Speaker 2: Connected TV or CTV is the new battleground for advertisers,

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Speaker 2: and YouTube has already won the first few rounds of

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Speaker 2: this battle.

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Speaker 1: You say, by man. Unlike traditional TV ads, which are

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Speaker 1: often hard to measure, CTV ads are delivered via Internet

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Speaker 1: connected TVs.

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Speaker 2: That means they can target their audience a whole lot better.

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Speaker 1: They know what that viewers watched previously as well as

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Speaker 1: their interests.

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Speaker 2: They can track data on the performance of the ads

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Speaker 2: as well.

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Speaker 1: Yeah, they're not guessing that the audience of the block

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Speaker 1: is middle aged men and women in a two story

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Speaker 1: house in metro Melbourne or Sydney. In fact, by Man

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Speaker 1: YouTube claims CTV ads on its platform drove over one

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Speaker 1: billion conversions in the past twelve months.

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Speaker 2: So Josey boy YouTube isn't just an online video platform

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Speaker 2: no more.

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Speaker 1: It's a TV network, a search engine, a music service,

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Speaker 1: and an ad tech beast all in one.

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Speaker 2: And clearly it is working. Yeah.

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Speaker 1: For our third and final story, Paramount has crashed the

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Speaker 1: Hollywood party with a one hundred and eight billion US dollar

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Speaker 1: hostile bid for Warner Brothers.

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Speaker 2: Discovery puts the popcorn in that microwave. Jussy Boy, close

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Speaker 2: the door, because this is peak Hollywood drama. Tell me more.

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Speaker 1: Okay, So Warner Brothers Discovery is the entertainment giant behind HBO, CNN, DC, Comics,

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Speaker 1: Harry Potter, and HBO Max as well.

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Speaker 2: This is the company that actually merged Warner Brothers and

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Speaker 2: Discovery back in April twenty twenty two in a forty

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Speaker 2: three billion dollar merger and b man Netflix.

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Speaker 1: Well, they need absolutely no introduction at all.

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Speaker 2: Late last week, Netflix announced a deal to acquire Warner

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Speaker 2: Brothers Discovery studio and streaming business including HBO Max.

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Speaker 1: Yeah, this is a cash and stock offer that valued

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Speaker 1: this part of the business at seventy two billion US

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Speaker 1: dollars in equity.

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Speaker 2: But this didn't include the discovery part of the business.

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Speaker 1: And the man at the time, this deal was announced

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Speaker 1: and approved by Warner brother Discoveries board, and it seemed

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Speaker 1: like it was all wrapped up in a nice and

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Speaker 1: little package.

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Speaker 2: Until Paramount Skydants entered the chat.

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Speaker 1: Yeah. Paramount is now owned by David Ellison, sign of

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Speaker 1: Oracle founder Larry Ellison, and.

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Speaker 2: He has just launched an all cash, hostile takeover to

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Speaker 2: Warner Brothers Discovery.

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Speaker 1: Paramounts offered to buy the entirety of Warner Brothers Discovery

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Speaker 1: in a one hundred and eight billion US dollar all

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Speaker 1: cash deal. A little late for this deal now, Juzzy

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Speaker 1: Boy shortly and that's why Paramount's offer is a hostile one.

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Speaker 2: Yeah, they're taking their case directly to Warner brother Discovery's shareholders,

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Speaker 2: but Warner Bro Discoveries board still recommends the Netflix deal

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Speaker 2: for now. So what's the key learning here?

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Speaker 1: A hostile takeover is basically a corporate git crashing.

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Speaker 2: It happens when a company attempts to acquire another business

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Speaker 2: by going directly to shareholders rather than negotiating with its board.

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Speaker 1: It usually occurs when the target company has rejected previous

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Speaker 1: bids or prefers another buyer, like Warner choosing Netflix. And

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Speaker 1: in this scenario, Paramount is launching a tender.

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Speaker 2: Offer that means shareholders receive a public invitation to sell

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Speaker 2: their shares at a specific price, in this case thirty

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Speaker 2: bukker rounies per share, which is.

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Speaker 1: Even higher than the Netflix offer of twenty seven dollars

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Speaker 1: per share.

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Speaker 2: And this tender offer bypasses management entirely. I mean, for Paramount, the.

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Speaker 1: Goal is to accumulate enough shares to gain a majority

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Speaker 1: or controlling stake in Water Brothers Discovery.

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Speaker 2: And this would then allow them to replace the existing

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Speaker 2: board and push the deal through.

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Speaker 1: And the man, let me tell you, isn't the first

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Speaker 1: time the Ellisons have done a hostile.

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Speaker 2: Takeover, all the way back two thousand and five Oracle,

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Speaker 2: which was bounded by Ellison's father, they launched a hostile

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Speaker 2: takeover offer for a company called PeopleSoft.

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Speaker 1: Eblesoft tried to reject the offer multiple times that Oracle

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Speaker 1: one and that support from shareholders to force the sale

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Speaker 1: to happen.

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Speaker 2: Next minute, deal closed and PeopleSoft became part of Oracle's

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Speaker 2: Enterprise software division for ten point three billion US dollars.

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Speaker 1: So, while tender offers rarely succeed, the Ellisons have a

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Speaker 1: tried and tested playbook.

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Speaker 2: Thanks for listening, and we'll see you on Monday,