1 00:00:05,200 --> 00:00:06,600 Speaker 1: This is what the Flux. 2 00:00:06,720 --> 00:00:10,360 Speaker 2: I'm Brett justin Monday, the thirteenth of October, Juzzy boy. 3 00:00:10,360 --> 00:00:13,280 Speaker 1: Australia's national property market has increased by six point two 4 00:00:13,320 --> 00:00:16,360 Speaker 1: percent annually, and when the RBA Governor was asked whether 5 00:00:16,400 --> 00:00:19,920 Speaker 1: the RBA cash rate was responsible, she was very quick 6 00:00:20,000 --> 00:00:22,360 Speaker 1: to shut this down. According to her, it's not cheaper 7 00:00:22,360 --> 00:00:25,920 Speaker 1: money driving prices up. It's good old fashioned supply and 8 00:00:26,040 --> 00:00:27,120 Speaker 1: demand economics. 9 00:00:27,120 --> 00:00:29,840 Speaker 2: One O, one B, manypos am. With Halloween coming up 10 00:00:29,840 --> 00:00:31,960 Speaker 2: in the next couple of weeks, we've gotten into the 11 00:00:32,000 --> 00:00:35,800 Speaker 2: spirit of Flex as well, busting three spooky money viars. 12 00:00:35,960 --> 00:00:37,559 Speaker 2: Make sure to check out the Flux app and our 13 00:00:37,640 --> 00:00:38,680 Speaker 2: latest article. 14 00:00:38,479 --> 00:00:41,199 Speaker 1: Three Big Stories Today, Juzzy boy, let's do it for 15 00:00:41,360 --> 00:00:45,680 Speaker 1: our first. Combank has officially ditched old school servers and 16 00:00:45,800 --> 00:00:49,559 Speaker 1: have shifted their core banking system into Amazon Web Services 17 00:00:49,640 --> 00:00:50,360 Speaker 1: data centers. 18 00:00:50,360 --> 00:00:52,360 Speaker 2: Com Bank getting old techie on us hereb man, So 19 00:00:52,440 --> 00:00:53,320 Speaker 2: what is going on here? 20 00:00:53,360 --> 00:00:56,520 Speaker 1: Well? Combank, aka the Big Yellow of Australia, was founded 21 00:00:56,520 --> 00:00:57,840 Speaker 1: in nineteen eleven and. 22 00:00:57,840 --> 00:01:00,640 Speaker 2: With its more than seventeen million customers, it's become the 23 00:01:00,800 --> 00:01:03,600 Speaker 2: largest public company on the ASX by marketcap. 24 00:01:03,640 --> 00:01:05,880 Speaker 1: We're talking a market cap of more than two hundred 25 00:01:05,880 --> 00:01:07,080 Speaker 1: and eighty billion dollars. 26 00:01:07,120 --> 00:01:09,560 Speaker 2: Wow, now, Beman for some context. While you're twiddling your 27 00:01:09,560 --> 00:01:11,800 Speaker 2: thumbs on your banking app sending a payment to a friend, 28 00:01:11,880 --> 00:01:15,440 Speaker 2: that payment needs to be processed somewhere, somehow. 29 00:01:15,080 --> 00:01:17,400 Speaker 1: And traditionally the big banks have relied on their own 30 00:01:17,600 --> 00:01:21,959 Speaker 1: in house servers to process these sorts of transaction, you know, clunky. 31 00:01:21,600 --> 00:01:24,600 Speaker 2: Physical servers sit in freezing rooms with air cons to 32 00:01:24,640 --> 00:01:25,399 Speaker 2: control their heat. 33 00:01:25,520 --> 00:01:27,840 Speaker 1: But now CBA has locked the door and tossed out 34 00:01:27,840 --> 00:01:30,000 Speaker 1: the key to these dusty old server rooms. 35 00:01:30,080 --> 00:01:32,360 Speaker 2: Yep, it's moved its core systems into the cloud and 36 00:01:32,400 --> 00:01:35,520 Speaker 2: announced a cushy new partnership with Amazon Web Services and 37 00:01:35,680 --> 00:01:36,040 Speaker 2: use boy. 38 00:01:36,160 --> 00:01:38,679 Speaker 1: It's not the first Australian bank to go cloud hopping. 39 00:01:38,760 --> 00:01:41,559 Speaker 2: Nope. Mcquaribank moved its core banking system into the cloud 40 00:01:41,600 --> 00:01:42,479 Speaker 2: in twenty twenty one. 41 00:01:42,560 --> 00:01:44,960 Speaker 1: But the other Big four banks they are trying desperately 42 00:01:45,040 --> 00:01:45,720 Speaker 1: to make the move. 43 00:01:46,160 --> 00:01:47,520 Speaker 2: So what is the key learning here? 44 00:01:47,600 --> 00:01:50,640 Speaker 1: The banks that adopt new technology early often gain an 45 00:01:50,760 --> 00:01:52,520 Speaker 1: edge that compounds over time. 46 00:01:52,600 --> 00:01:55,040 Speaker 2: You see, be Man. When a bank modernizes its systems 47 00:01:55,120 --> 00:01:57,360 Speaker 2: before everyone else, it wins. 48 00:01:57,080 --> 00:02:00,000 Speaker 1: Twice, first with customers and then with investors. 49 00:02:00,080 --> 00:02:02,240 Speaker 2: Yeah. Let's take McQuary for example. They were the first 50 00:02:02,240 --> 00:02:04,520 Speaker 2: big bank to transition to the cloud in twenty twenty one. 51 00:02:04,600 --> 00:02:07,640 Speaker 1: Yep, it'sween growing its mortgage market share rapidly, largely because 52 00:02:07,640 --> 00:02:10,000 Speaker 1: of its ability to quickly approve loan application. 53 00:02:10,160 --> 00:02:12,320 Speaker 2: In fact, a Man mccrary's mortgage book grew at a 54 00:02:12,400 --> 00:02:14,560 Speaker 2: rate of three point eight times the average of the 55 00:02:14,600 --> 00:02:16,200 Speaker 2: banking system in August this year. 56 00:02:16,240 --> 00:02:18,400 Speaker 1: On the other hand, A Z has spent about six 57 00:02:18,480 --> 00:02:21,400 Speaker 1: years and approximately two billion dollars trying to build A 58 00:02:21,480 --> 00:02:22,560 Speaker 1: and Z plus with. 59 00:02:22,600 --> 00:02:24,600 Speaker 2: The goal for that to be their core banking system, 60 00:02:24,720 --> 00:02:26,200 Speaker 2: but still no success. 61 00:02:26,320 --> 00:02:29,120 Speaker 1: So jusey boy. After the mcquarie success, CommBank will be 62 00:02:29,120 --> 00:02:31,600 Speaker 1: hoping it's big migration to cloud might help it save 63 00:02:31,639 --> 00:02:32,520 Speaker 1: some costs, but. 64 00:02:32,440 --> 00:02:35,280 Speaker 2: More importantly help a grow market share against its slower 65 00:02:35,320 --> 00:02:36,279 Speaker 2: moving competitors. 66 00:02:36,520 --> 00:02:40,360 Speaker 1: For our second story, Netflix has announced new games within 67 00:02:40,400 --> 00:02:43,760 Speaker 1: your TV because apparently you weren't watching enough already. 68 00:02:43,880 --> 00:02:46,600 Speaker 2: I'm more polertic games from our childhood getting a tech upgrade, 69 00:02:46,639 --> 00:02:47,560 Speaker 2: so tell me more. So. 70 00:02:47,720 --> 00:02:51,480 Speaker 1: Netflix is still the undisputed world champ of the streaming wars. 71 00:02:51,560 --> 00:02:55,119 Speaker 2: We're talking bridget in the Monster series Wednesday. 72 00:02:54,760 --> 00:02:57,120 Speaker 1: And over three hundred million paid members a man. 73 00:02:57,160 --> 00:02:59,600 Speaker 2: You may remember that Netflix has been talking about gaming 74 00:02:59,639 --> 00:03:02,679 Speaker 2: ambition since twenty twenty one, but now they have made 75 00:03:02,840 --> 00:03:04,079 Speaker 2: their biggest move so far. 76 00:03:04,200 --> 00:03:07,320 Speaker 1: As of last week, Netflix subscribers can play games directly 77 00:03:07,360 --> 00:03:10,600 Speaker 1: on their smart TVs using your phone as a controller. 78 00:03:10,760 --> 00:03:11,959 Speaker 1: So what games are we talking here? 79 00:03:12,000 --> 00:03:13,959 Speaker 2: All the old school board games you used to play 80 00:03:14,000 --> 00:03:17,040 Speaker 2: with your family and friends, A lot of nostalgia. 81 00:03:16,720 --> 00:03:20,480 Speaker 1: Like Boggle, Pictionary, Tetris, but also Lego party game. 82 00:03:20,560 --> 00:03:23,080 Speaker 2: And notice how these are all group focus games. I 83 00:03:23,320 --> 00:03:26,639 Speaker 2: did notice that part of Netflix's plan to encourage more 84 00:03:26,680 --> 00:03:28,000 Speaker 2: customers to participate. 85 00:03:28,120 --> 00:03:30,880 Speaker 1: The goal is to keep us glued to Netflix even 86 00:03:30,880 --> 00:03:33,880 Speaker 1: when we're not binging another true crime doco. 87 00:03:34,160 --> 00:03:35,960 Speaker 2: So true? So what is the key learning here? 88 00:03:36,040 --> 00:03:39,000 Speaker 1: In the attention economy? Whoever owns your couch time wins? 89 00:03:39,160 --> 00:03:41,880 Speaker 2: Yeah, we know that Netflix already has millions of subscribers 90 00:03:41,920 --> 00:03:44,560 Speaker 2: who spend significant screen time watching content. 91 00:03:44,720 --> 00:03:47,600 Speaker 1: In fact, according to Netflix's latest earnings, the average paid 92 00:03:47,640 --> 00:03:50,800 Speaker 1: subscribers spends about two hours a day watching shows on 93 00:03:50,840 --> 00:03:51,280 Speaker 1: the Flix. 94 00:03:51,320 --> 00:03:54,640 Speaker 2: That's roughly fourteen hours a week devoted to the Netflix content. 95 00:03:54,720 --> 00:03:58,840 Speaker 1: But to grow that engagement further, it needs more sticky experiences. 96 00:03:58,160 --> 00:04:01,240 Speaker 2: And games offer a clear half forward for Netflix. 97 00:04:01,320 --> 00:04:04,400 Speaker 1: That means every extra hour people choose to play compared 98 00:04:04,440 --> 00:04:06,880 Speaker 1: to switch apps is an hour Netflix. 99 00:04:06,480 --> 00:04:08,240 Speaker 2: Retains and can monetize too. 100 00:04:08,400 --> 00:04:10,840 Speaker 1: Yep. Consumer spend one hundred and forty billion dollars a 101 00:04:10,880 --> 00:04:13,080 Speaker 1: year on gaming and that excludes. 102 00:04:12,640 --> 00:04:15,600 Speaker 2: The Russian and Chinese markets as well as advertising in 103 00:04:15,640 --> 00:04:16,120 Speaker 2: the games. 104 00:04:16,200 --> 00:04:19,280 Speaker 1: So this is Netflix's play to start earning a percentage 105 00:04:19,279 --> 00:04:20,360 Speaker 1: of that market over time. 106 00:04:20,440 --> 00:04:22,919 Speaker 2: And b man, you'd be a brave person to bet 107 00:04:22,960 --> 00:04:23,760 Speaker 2: against the Flix. 108 00:04:23,960 --> 00:04:27,640 Speaker 1: For our third and final story, Dezone, the sports streaming 109 00:04:27,680 --> 00:04:30,720 Speaker 1: platform and Foxtel's new owner, has made a US nine 110 00:04:30,839 --> 00:04:33,839 Speaker 1: hundred and thirty six million dollar loss in twenty twenty four. 111 00:04:34,120 --> 00:04:37,080 Speaker 2: Nothing like a company that celebrates losing slightly less money 112 00:04:37,080 --> 00:04:38,719 Speaker 2: this year, so tell me more so. 113 00:04:38,880 --> 00:04:42,800 Speaker 1: Dezone, spelled daz n was founded in twenty fifteen and 114 00:04:42,880 --> 00:04:45,680 Speaker 1: has ambitions to become the Spotify of sport. 115 00:04:45,880 --> 00:04:49,680 Speaker 2: Yeah, it's a global sports streaming service owned by Access Industries, 116 00:04:49,720 --> 00:04:52,839 Speaker 2: which is a private investment group owned by Len Blavatnik 117 00:04:52,920 --> 00:04:53,480 Speaker 2: and Jasyboy. 118 00:04:53,560 --> 00:04:56,719 Speaker 1: De Zone has made quite the splash in Australia recently 119 00:04:56,839 --> 00:05:00,479 Speaker 1: after acquiring Foxtel for two point two billion dollars the man. 120 00:05:00,480 --> 00:05:03,599 Speaker 2: It ain't just Foxtel. De Zone also owns broadcast rights 121 00:05:03,640 --> 00:05:06,120 Speaker 2: to the Bundesliga and LaLiga Soccer. 122 00:05:05,960 --> 00:05:09,440 Speaker 1: Also Boxing MMA, the NFL internationally. 123 00:05:09,600 --> 00:05:11,440 Speaker 2: Now, the good news for de Zone is that it's 124 00:05:11,520 --> 00:05:14,000 Speaker 2: revenue climb to three point two billion US dollars in 125 00:05:14,000 --> 00:05:14,719 Speaker 2: twenty twenty four. 126 00:05:14,760 --> 00:05:16,599 Speaker 1: All right, hit me with some bad news, juzzy boy. 127 00:05:16,760 --> 00:05:19,520 Speaker 2: Well, despite that revenue, the Zone still made a nine 128 00:05:19,600 --> 00:05:22,520 Speaker 2: hundred and thirty six million US dollar loss for the year. 129 00:05:22,400 --> 00:05:24,600 Speaker 1: Which is actually a better performance than it's a one 130 00:05:24,600 --> 00:05:27,000 Speaker 1: point four billion dollar loss the year before. 131 00:05:27,040 --> 00:05:28,839 Speaker 2: So to keep the lights on, the Zone had to 132 00:05:28,839 --> 00:05:32,200 Speaker 2: call in a billion dollars from Saudi Arabia's sovereign Wealth Fund. 133 00:05:32,080 --> 00:05:34,560 Speaker 1: And don't forget five hundred and eighty seven million dollars 134 00:05:34,560 --> 00:05:35,839 Speaker 1: from Access Industries. 135 00:05:35,880 --> 00:05:38,280 Speaker 2: But do Zone CEO reckons twenty twenty six is its 136 00:05:38,400 --> 00:05:40,440 Speaker 2: year as it pushes towards profitability. 137 00:05:40,480 --> 00:05:43,360 Speaker 1: Big talk for a team still deep in the red zone. 138 00:05:43,920 --> 00:05:45,320 Speaker 2: So what is the key leading here? 139 00:05:45,400 --> 00:05:48,160 Speaker 1: The path to profitability is the journey a company takes 140 00:05:48,200 --> 00:05:51,839 Speaker 1: from operating at a loss to generating consistent net income. 141 00:05:51,920 --> 00:05:54,680 Speaker 2: Yeah, for high growth companies, early losses are often a 142 00:05:54,720 --> 00:05:55,720 Speaker 2: bit part of the plan. 143 00:05:55,880 --> 00:05:59,560 Speaker 1: It's the price of building technology or buying rights attracting 144 00:05:59,640 --> 00:06:00,880 Speaker 1: millions of customers. 145 00:06:00,920 --> 00:06:03,479 Speaker 2: But for these high growth companies, the key is also 146 00:06:03,520 --> 00:06:06,560 Speaker 2: showing a clear path towards profitability. 147 00:06:05,920 --> 00:06:08,599 Speaker 1: Or else investors can feel like they're investing good money 148 00:06:08,600 --> 00:06:10,720 Speaker 1: after bad and ultimately just lose hope. 149 00:06:10,720 --> 00:06:13,520 Speaker 2: That's not to say it is impossible to hit profitability 150 00:06:13,560 --> 00:06:16,640 Speaker 2: after many years be man. Take Amazon for example, uh huh. 151 00:06:16,640 --> 00:06:19,760 Speaker 1: It spent nearly nine years focused purely on growth before 152 00:06:19,800 --> 00:06:22,679 Speaker 1: turning its very first annual profit in two thousand and three. 153 00:06:22,520 --> 00:06:25,560 Speaker 2: And ubertook even longer. They reported their first operating profit 154 00:06:25,600 --> 00:06:27,239 Speaker 2: fourteen years after launching. 155 00:06:27,400 --> 00:06:29,440 Speaker 1: So Juzzy boy, If de Zone wants to become the 156 00:06:29,520 --> 00:06:32,520 Speaker 1: quote Spotify of sport, it needs to start showing can 157 00:06:32,600 --> 00:06:34,360 Speaker 1: actually become a sustainable business. 158 00:06:34,360 --> 00:06:36,799 Speaker 2: But dam there is so much information on social media 159 00:06:36,839 --> 00:06:39,920 Speaker 2: it's not easy to tell that's from friction. So if 160 00:06:40,040 --> 00:06:42,040 Speaker 2: this season of trick or trading, we're going to bust 161 00:06:42,040 --> 00:06:45,480 Speaker 2: three spooky money bits people easily get fooled by. Do 162 00:06:45,520 --> 00:06:47,359 Speaker 2: you want to see what those spooky money bits are? 163 00:06:47,400 --> 00:06:49,160 Speaker 2: They shut it, Download the Flux app and check out 164 00:06:49,200 --> 00:06:49,960 Speaker 2: our latest startingle. 165 00:06:50,040 --> 00:06:52,640 Speaker 1: Thanks for listening, and we'll see you on Wednesday.