Speaker 1: This is what the flax. I'm Brett and I'm Justin
Speaker 1: and it's Friday, the nineteenth of December. In this recap episode,
Speaker 1: we're breaking down the biggest streaming stories of twenty twenty five.
Speaker 1: Twenty twenty five was a turning point for streaming. It
Speaker 1: was about big deals, ownership shakeups and platforms that are
Speaker 1: picking new sides. So let's take a recap of the
Speaker 1: three biggest streaming stories of twenty twenty five in Australia
Speaker 1: and around the world.
Speaker 2: Three massive stories today, Juzzy boy let's do it for
Speaker 2: our first. Dezone, the sports streaming platform and Foxtel's new owner,
Speaker 2: has made a US nine hundred and thirty six million
Speaker 2: dollar loss in twenty twenty four.
Speaker 1: Nothing like a company that celebrates losing slightly less money
Speaker 1: this year, so tell.
Speaker 2: Me more so. De Zone spelled da z N was
Speaker 2: founded in twenty fifteen and has ambitions to become the
Speaker 2: Spotify of sport.
Speaker 1: Yeah. It's a global sports streaming service owned by Access Industries,
Speaker 1: which is a private investment group owned by Len Blavatnik
Speaker 1: and Jasey Boyd.
Speaker 2: The Zone has made quite the splash in Australia recently
Speaker 2: after acquiring Foxtel for two point two billion dollars.
Speaker 1: But then, man, it ain't just Foxtel. De Zone also
Speaker 1: owns broadcast rights to the Bundesliga and LaLiga Soccer.
Speaker 2: Also Boxing MMA, the NFL internationally.
Speaker 1: Now, the good news for de Zone is that it's
Speaker 1: revenue climb to three point two billion US dollars in
Speaker 1: twenty twenty four.
Speaker 2: All right, hit me with some bad news, juzzy boy.
Speaker 1: Well, despite that revenue, the Zone still made a nine
Speaker 1: hundred and thirty six million US dollar loss for the year,
Speaker 1: which is actually.
Speaker 2: A better performance than it's a one point four billion
Speaker 2: dollar loss the year before.
Speaker 1: So to keep the lights on, do Zone had to
Speaker 1: call in a billion dollars from Saudi Arabia's sovereign wealth.
Speaker 2: Fun and don't forget five hundred and eighty seven million
Speaker 2: dollars from Access Industries.
Speaker 1: But do Zone CEO reckons twenty twenty six is its
Speaker 1: year as it pushes towards profitability.
Speaker 2: Big talk for a team still deep in the red zone.
Speaker 1: So what is the key leading here?
Speaker 2: The path to profitability is the journey a company takes
Speaker 2: from operating at a loss to generating consistent net income.
Speaker 1: Yeah, For high growth companies, early life are often a
Speaker 1: bit part of the plan.
Speaker 2: It's the price of building technology or buying rights attracting
Speaker 2: millions of customers.
Speaker 1: But for these high growth companies, the key is also
Speaker 1: showing a clear path towards profitability.
Speaker 2: Or else investors can feel like they're investing good money
Speaker 2: after bad and ultimately just lose hope.
Speaker 1: That's not to say it is impossible to hit profitability
Speaker 1: after many years be man. Take Amazon for example, uh huh.
Speaker 2: It's spent nearly nine years focused purely on growth before
Speaker 2: turning its very first annual profit in two thousand and three, and.
Speaker 1: Ubertook even longer. They reported their first operating profit fourteen
Speaker 1: years after launching.
Speaker 2: So Juzzy Boy. If de Zone wants to become the
Speaker 2: quote Spotify of sport, it needs to start showing can
Speaker 2: actually become a sustainable business.
Speaker 1: For our second story, YouTube has smashed viewership records and
Speaker 1: ad revenue as it competes head on with old school
Speaker 1: TV channels.
Speaker 2: YouTube's come a long way since Charlie bit my finger.
Speaker 2: So tell me more, okay? So YouTube is owned by Alphabet,
Speaker 2: which also owns Google, Google Cloud, Android, bit Bit, Gemini
Speaker 2: Way mow and plenty more and the man.
Speaker 1: Google bought YouTube back in two thousand and six for
Speaker 1: just one point sixty five billion US dollars.
Speaker 2: And now YouTube is making nearly eight times that amount
Speaker 2: in advertising revenue each and every year.
Speaker 1: That's right, YouTube's ad revenue jumped to nine point eight
Speaker 1: billion US dollars in the past year, which was up
Speaker 1: thirteen percent.
Speaker 2: But even scarier than that, Juzzy Boy, is that YouTube
Speaker 2: isn't just an online video streaming platform anymore.
Speaker 1: It's considered more of a fully fledged TV network because
Speaker 1: of its ability to be connected to your TV.
Speaker 2: In fact, YouTube now accounts for twelve point eight percent
Speaker 2: of all TV viewership.
Speaker 1: That's the high share any platform has ever hit, according
Speaker 1: to Nielsen and Juzzy Wait, this is just another reminder
Speaker 1: of how connected TV has crushed old school TV networks
Speaker 1: and will probably continue to do so a RIP network
Speaker 1: ten So what is the key learning here?
Speaker 2: Connected TV or CTV is the new battleground for advertisers,
Speaker 2: and YouTube has already won the first few rounds of
Speaker 2: this battle.
Speaker 1: You say, by man. Unlike traditional TV ads, which are
Speaker 1: often hard to measure, CTV ads are delivered via Internet
Speaker 1: connected TVs.
Speaker 2: That means they can target their audience a whole lot better.
Speaker 1: They know what that viewers watched previously as well as
Speaker 1: their interests.
Speaker 2: They can track data on the performance of the ads
Speaker 2: as well.
Speaker 1: Yeah, they're not guessing that the audience of the block
Speaker 1: is middle aged men and women in a two story
Speaker 1: house in metro Melbourne or Sydney. In fact, by Man
Speaker 1: YouTube claims CTV ads on its platform drove over one
Speaker 1: billion conversions in the past twelve months.
Speaker 2: So Josey boy YouTube isn't just an online video platform
Speaker 2: no more.
Speaker 1: It's a TV network, a search engine, a music service,
Speaker 1: and an ad tech beast all in one.
Speaker 2: And clearly it is working. Yeah.
Speaker 1: For our third and final story, Paramount has crashed the
Speaker 1: Hollywood party with a one hundred and eight billion US dollar
Speaker 1: hostile bid for Warner Brothers.
Speaker 2: Discovery puts the popcorn in that microwave. Jussy Boy, close
Speaker 2: the door, because this is peak Hollywood drama. Tell me more.
Speaker 1: Okay, So Warner Brothers Discovery is the entertainment giant behind HBO, CNN, DC, Comics,
Speaker 1: Harry Potter, and HBO Max as well.
Speaker 2: This is the company that actually merged Warner Brothers and
Speaker 2: Discovery back in April twenty twenty two in a forty
Speaker 2: three billion dollar merger and b man Netflix.
Speaker 1: Well, they need absolutely no introduction at all.
Speaker 2: Late last week, Netflix announced a deal to acquire Warner
Speaker 2: Brothers Discovery studio and streaming business including HBO Max.
Speaker 1: Yeah, this is a cash and stock offer that valued
Speaker 1: this part of the business at seventy two billion US
Speaker 1: dollars in equity.
Speaker 2: But this didn't include the discovery part of the business.
Speaker 1: And the man at the time, this deal was announced
Speaker 1: and approved by Warner brother Discoveries board, and it seemed
Speaker 1: like it was all wrapped up in a nice and
Speaker 1: little package.
Speaker 2: Until Paramount Skydants entered the chat.
Speaker 1: Yeah. Paramount is now owned by David Ellison, sign of
Speaker 1: Oracle founder Larry Ellison, and.
Speaker 2: He has just launched an all cash, hostile takeover to
Speaker 2: Warner Brothers Discovery.
Speaker 1: Paramounts offered to buy the entirety of Warner Brothers Discovery
Speaker 1: in a one hundred and eight billion US dollar all
Speaker 1: cash deal. A little late for this deal now, Juzzy
Speaker 1: Boy shortly and that's why Paramount's offer is a hostile one.
Speaker 2: Yeah, they're taking their case directly to Warner brother Discovery's shareholders,
Speaker 2: but Warner Bro Discoveries board still recommends the Netflix deal
Speaker 2: for now. So what's the key learning here?
Speaker 1: A hostile takeover is basically a corporate git crashing.
Speaker 2: It happens when a company attempts to acquire another business
Speaker 2: by going directly to shareholders rather than negotiating with its board.
Speaker 1: It usually occurs when the target company has rejected previous
Speaker 1: bids or prefers another buyer, like Warner choosing Netflix. And
Speaker 1: in this scenario, Paramount is launching a tender.
Speaker 2: Offer that means shareholders receive a public invitation to sell
Speaker 2: their shares at a specific price, in this case thirty
Speaker 2: bukker rounies per share, which is.
Speaker 1: Even higher than the Netflix offer of twenty seven dollars
Speaker 1: per share.
Speaker 2: And this tender offer bypasses management entirely. I mean, for Paramount, the.
Speaker 1: Goal is to accumulate enough shares to gain a majority
Speaker 1: or controlling stake in Water Brothers Discovery.
Speaker 2: And this would then allow them to replace the existing
Speaker 2: board and push the deal through.
Speaker 1: And the man, let me tell you, isn't the first
Speaker 1: time the Ellisons have done a hostile.
Speaker 2: Takeover, all the way back two thousand and five Oracle,
Speaker 2: which was bounded by Ellison's father, they launched a hostile
Speaker 2: takeover offer for a company called PeopleSoft.
Speaker 1: Eblesoft tried to reject the offer multiple times that Oracle
Speaker 1: one and that support from shareholders to force the sale
Speaker 1: to happen.
Speaker 2: Next minute, deal closed and PeopleSoft became part of Oracle's
Speaker 2: Enterprise software division for ten point three billion US dollars.
Speaker 1: So, while tender offers rarely succeed, the Ellisons have a
Speaker 1: tried and tested playbook.
Speaker 2: Thanks for listening, and we'll see you on Monday,