1 00:00:05,160 --> 00:00:06,560 Speaker 1: This is what the Flux. 2 00:00:06,640 --> 00:00:09,920 Speaker 2: I'm Brettan, I'm justin and it's Monday, eleventh of August. 3 00:00:09,560 --> 00:00:12,200 Speaker 1: Josey boy. Tomorrow is the big day where the Reserve 4 00:00:12,280 --> 00:00:14,760 Speaker 1: Bank of Australia's board members will announce their big cash 5 00:00:14,800 --> 00:00:18,160 Speaker 1: rate decision for August. Will it remain paused? Will it drop? 6 00:00:18,239 --> 00:00:19,200 Speaker 1: Will it increase? 7 00:00:19,480 --> 00:00:19,680 Speaker 2: Likely? 8 00:00:19,760 --> 00:00:22,320 Speaker 1: Does it? Boy? The markets are currently tipping a ninety 9 00:00:22,320 --> 00:00:24,880 Speaker 1: six percent chance of a cash rate cut, but it 10 00:00:24,920 --> 00:00:27,360 Speaker 1: was pretty high last month and the RBA held firm 11 00:00:27,560 --> 00:00:29,760 Speaker 1: two thirty pm tomorrow. 12 00:00:29,280 --> 00:00:31,280 Speaker 2: That is right, be man, and you can guarantee that 13 00:00:31,320 --> 00:00:33,800 Speaker 2: Flux will be there with you as soon as it happens. 14 00:00:33,840 --> 00:00:36,120 Speaker 2: We'll have the breakdown of the decision, why the RBA 15 00:00:36,240 --> 00:00:38,000 Speaker 2: made that call and what it means for you. To 16 00:00:38,040 --> 00:00:40,440 Speaker 2: make sure to download the Flux app and check it out. 17 00:00:40,520 --> 00:00:44,000 Speaker 1: Three riveting stories today, Juzzy boy, Let's do it for 18 00:00:44,080 --> 00:00:47,040 Speaker 1: our first news. Corp has seen a fourteen percent jump 19 00:00:47,040 --> 00:00:49,360 Speaker 1: in Ebitt Dart for the full year, but parts of 20 00:00:49,400 --> 00:00:52,880 Speaker 1: its Australian operations have become a bit of a family embarrassment. 21 00:00:53,400 --> 00:00:56,720 Speaker 2: I believe they called these results sterling very on brand 22 00:00:56,760 --> 00:00:58,440 Speaker 2: for a company that owns The Times in the UK, 23 00:00:58,840 --> 00:00:59,600 Speaker 2: so tell me more so. 24 00:00:59,640 --> 00:01:02,440 Speaker 1: News Coop is the global media in publishing behemoth that 25 00:01:02,560 --> 00:01:04,560 Speaker 1: was founded way back in nineteen eighty. 26 00:01:04,600 --> 00:01:06,840 Speaker 2: It owns newspapers all over the world, from the Wall 27 00:01:06,880 --> 00:01:09,560 Speaker 2: Street Journal to the New York Post to The Times 28 00:01:09,560 --> 00:01:10,440 Speaker 2: in the UK and. 29 00:01:10,400 --> 00:01:14,040 Speaker 1: In Australia we'd been talking the Australian Herald's, Sun, Daily 30 00:01:14,120 --> 00:01:16,440 Speaker 1: Telegraph and several others. 31 00:01:16,560 --> 00:01:18,680 Speaker 2: Yep. Not to forget, it owns a sixty one percent 32 00:01:18,760 --> 00:01:20,880 Speaker 2: chunk of Ozzie real estate Giant, Aria. 33 00:01:20,640 --> 00:01:24,680 Speaker 1: Group and Juseyboy. Overall, the year panned out pretty well 34 00:01:24,720 --> 00:01:27,000 Speaker 1: for News Corp yep. Sor it's four year revenue jump 35 00:01:27,000 --> 00:01:30,199 Speaker 1: two percent not bad, and it's earning for interest, tax, 36 00:01:30,240 --> 00:01:34,080 Speaker 1: appreciation and amortization or EBIT dark jumped fourteen percent. They 37 00:01:34,120 --> 00:01:36,440 Speaker 1: tipped their hat off to Aria Group as well as 38 00:01:36,480 --> 00:01:38,440 Speaker 1: their US publication dow joone. 39 00:01:38,240 --> 00:01:40,559 Speaker 2: Yep, But they man it was News Corp's og Ozzie 40 00:01:40,640 --> 00:01:43,240 Speaker 2: publications that really let them down. Yep. 41 00:01:43,280 --> 00:01:46,639 Speaker 1: In FY twenty five, Melbourne's Herald Sun and Brisbane's Courier 42 00:01:46,680 --> 00:01:49,840 Speaker 1: Mail and Adelaide's The Advertiser they all lost paid subscriber couch. 43 00:01:49,880 --> 00:01:52,000 Speaker 2: But in good news for News Corp, The Australian and 44 00:01:52,120 --> 00:01:55,440 Speaker 2: Sydney's Daily Telegraph jumped five percent in subscriber. 45 00:01:55,000 --> 00:01:58,440 Speaker 1: Base and Juzzie Boy subscriber churn on its media division 46 00:01:58,600 --> 00:02:01,000 Speaker 1: is an ongoing challenge that you News Corp just needs to. 47 00:02:00,960 --> 00:02:03,080 Speaker 2: Manage yep, So what is the key learning here? 48 00:02:03,160 --> 00:02:06,560 Speaker 1: Subscription churn is the number or percentage of customers who 49 00:02:06,560 --> 00:02:10,040 Speaker 1: stop paying for a subscription service during a specific period. 50 00:02:10,040 --> 00:02:13,079 Speaker 2: For media companies, churney is a critical metric because their 51 00:02:13,080 --> 00:02:15,280 Speaker 2: subscriber revenue is recurring. 52 00:02:14,919 --> 00:02:17,400 Speaker 1: So that means losing a paying reader isn't just a 53 00:02:17,600 --> 00:02:20,040 Speaker 1: one off hit, it's an ongoing loss of income and 54 00:02:20,080 --> 00:02:22,080 Speaker 1: be man In news Corp's case, the one to two 55 00:02:22,120 --> 00:02:25,200 Speaker 1: percent drop in subscribers across their tabloids means thousands of 56 00:02:25,240 --> 00:02:28,880 Speaker 1: people canceling and improving retention by just five percent can 57 00:02:28,919 --> 00:02:32,160 Speaker 1: boost profits by anywhere between twenty five percent and even 58 00:02:32,240 --> 00:02:33,880 Speaker 1: up to ninety five percent, but. 59 00:02:33,840 --> 00:02:35,880 Speaker 2: They man The flip side is that acquiring a new 60 00:02:35,919 --> 00:02:38,840 Speaker 2: customer can cost five to seven times more than retaining 61 00:02:38,880 --> 00:02:41,320 Speaker 2: an existing one, and for News Corp, there aren't enough 62 00:02:41,320 --> 00:02:44,480 Speaker 2: new subscribers that are offsetting the churned one and this 63 00:02:44,680 --> 00:02:45,760 Speaker 2: compounds over time. 64 00:02:45,840 --> 00:02:48,080 Speaker 1: So unless News Corp. Can stop the churn, and they'll 65 00:02:48,080 --> 00:02:50,720 Speaker 1: be stuck in a pretty expensive game of marketing to 66 00:02:50,760 --> 00:02:52,400 Speaker 1: sustain their subscriber numbers. 67 00:02:52,440 --> 00:02:55,520 Speaker 2: For our second story, McDonald's has bounced back in the 68 00:02:55,520 --> 00:02:58,760 Speaker 2: most recent quarter. It's going full Klonel Sanders in the 69 00:02:58,840 --> 00:02:59,520 Speaker 2: Chicken Wars. 70 00:03:00,080 --> 00:03:03,440 Speaker 1: Macide's flipping burgers and flipping their fortunes as well. What 71 00:03:03,680 --> 00:03:05,679 Speaker 1: the Ronald McDonald is going on here? 72 00:03:05,760 --> 00:03:08,840 Speaker 2: Okay? So McDonald's found back in nineteen forty in California 73 00:03:08,880 --> 00:03:11,120 Speaker 2: and has become the world's largest fast food chain. 74 00:03:11,240 --> 00:03:14,359 Speaker 1: Get this, McDonald serves over sixty five million customers daily 75 00:03:14,400 --> 00:03:16,639 Speaker 1: across more than one hundred countries and then man. 76 00:03:16,680 --> 00:03:19,480 Speaker 2: In May this year, McDonald's gave a complete mayor of 77 00:03:19,520 --> 00:03:20,320 Speaker 2: an earnings update. 78 00:03:20,440 --> 00:03:22,680 Speaker 1: Yes, I do recall that macas warned of its worst 79 00:03:22,720 --> 00:03:25,960 Speaker 1: results since the pandemic. So this quarter, investors and shareholders 80 00:03:25,960 --> 00:03:29,000 Speaker 1: and obviously McDonald's customers were eagerly awaiting the results and 81 00:03:29,040 --> 00:03:30,920 Speaker 1: the next collab or new product announcement. 82 00:03:31,400 --> 00:03:33,560 Speaker 2: And it was good news for all because they quarterly 83 00:03:33,560 --> 00:03:36,240 Speaker 2: revenue hit six point eight four billion US dollars, which 84 00:03:36,280 --> 00:03:38,800 Speaker 2: beat expectations of around six point seven bill. 85 00:03:38,640 --> 00:03:41,480 Speaker 1: And net income increased to two point twenty five billion 86 00:03:41,760 --> 00:03:44,760 Speaker 1: US dollars, up from just over two billion US dollars 87 00:03:44,800 --> 00:03:45,240 Speaker 1: last year. 88 00:03:45,240 --> 00:03:47,480 Speaker 2: Even the Grimma's milkshake flop couldn't slow it. 89 00:03:47,480 --> 00:03:50,080 Speaker 1: Down, and does it wait? The secret to its turnaround 90 00:03:50,080 --> 00:03:52,240 Speaker 1: in profit comes from its push into chicken. 91 00:03:51,960 --> 00:03:54,720 Speaker 2: Which has really appealed to its value customers because it 92 00:03:54,760 --> 00:03:56,440 Speaker 2: can charge value prices. 93 00:03:56,600 --> 00:03:59,080 Speaker 1: So what is the grimms milkshake key learning? 94 00:03:59,120 --> 00:04:02,480 Speaker 2: Here at fast who joins? Many choices aren't just about taste, 95 00:04:02,520 --> 00:04:04,760 Speaker 2: They're about what fattens the bottom line. 96 00:04:04,480 --> 00:04:06,920 Speaker 1: In a cost of living crunch. Macca's reckons that value 97 00:04:07,040 --> 00:04:09,160 Speaker 1: has become a non negotiable for customers. 98 00:04:09,160 --> 00:04:11,040 Speaker 2: And the man, last time I checked it, you can't 99 00:04:11,040 --> 00:04:12,760 Speaker 2: offer value on beef products. 100 00:04:12,800 --> 00:04:15,280 Speaker 1: We'll get this juzzi boy. According to US government data, 101 00:04:15,360 --> 00:04:17,600 Speaker 1: the average price of a whole chicken in the US 102 00:04:17,760 --> 00:04:20,240 Speaker 1: was one dollar ninety nine per pound, and that was 103 00:04:20,240 --> 00:04:21,840 Speaker 1: in October twenty twenty four, while a. 104 00:04:21,760 --> 00:04:24,159 Speaker 2: Pound of ground beef was five dollars fifty nine. 105 00:04:24,160 --> 00:04:26,240 Speaker 1: And in Australia, beef is roughly four and a half 106 00:04:26,320 --> 00:04:29,320 Speaker 1: times more expensive than chicken as an average retail price, 107 00:04:29,360 --> 00:04:30,680 Speaker 1: and that's according to Rabobank. 108 00:04:30,720 --> 00:04:34,440 Speaker 2: So Mackidee has capitalized on that price differential and chicken demand. 109 00:04:34,440 --> 00:04:37,880 Speaker 1: We're talking the chicken, Big Mac and the crispy range, 110 00:04:37,880 --> 00:04:40,440 Speaker 1: which is more affordable for customers but also better for 111 00:04:40,520 --> 00:04:41,839 Speaker 1: Maca's own margins. 112 00:04:41,920 --> 00:04:44,440 Speaker 2: In fact, be Man McDonald's grown its chicken business to 113 00:04:44,560 --> 00:04:47,160 Speaker 2: double the size of beef in terms of market. 114 00:04:46,880 --> 00:04:48,760 Speaker 1: Share and jusie boy. It's a sign of how much 115 00:04:48,800 --> 00:04:50,440 Speaker 1: the fast food landscape has shifted. 116 00:04:50,520 --> 00:04:53,560 Speaker 2: Yeah, for decades, beef burgers with a crown jewel of the. 117 00:04:53,520 --> 00:04:57,320 Speaker 1: Menu, but now it seems like chicken is ruling the roost. 118 00:04:57,640 --> 00:05:01,120 Speaker 2: For our third and final story, Spotify has warned customers 119 00:05:01,120 --> 00:05:03,600 Speaker 2: of a price rise for its premium subscription, and a 120 00:05:03,680 --> 00:05:05,760 Speaker 2: shares jumped eight percent on the news. 121 00:05:06,000 --> 00:05:09,120 Speaker 1: This is certainly not music to the ears of Spotify subscribers, 122 00:05:09,200 --> 00:05:09,960 Speaker 1: so tell me more. 123 00:05:10,240 --> 00:05:12,400 Speaker 2: Spotify launching Sweden in two thousand and eight and is 124 00:05:12,400 --> 00:05:14,480 Speaker 2: the world's largest music streaming service. 125 00:05:14,600 --> 00:05:17,520 Speaker 1: It has nearly seven hundred million total users with two 126 00:05:17,640 --> 00:05:20,919 Speaker 1: hundred and seventy six million paying subscribers. 127 00:05:20,279 --> 00:05:23,120 Speaker 2: But then manned. Last month. Spotify shares got whacked after 128 00:05:23,120 --> 00:05:26,239 Speaker 2: it posted an eighty six million euro quarterly loss. 129 00:05:26,279 --> 00:05:29,920 Speaker 1: We're talking higher costs of staffing, marketing, and payroll taxes, So. 130 00:05:29,960 --> 00:05:32,720 Speaker 2: Now Spotify will pull the price leave to recover from 131 00:05:32,760 --> 00:05:33,560 Speaker 2: some of those losses. 132 00:05:33,640 --> 00:05:37,280 Speaker 1: Yep, they're planning to raise subscription prices across South Asia, 133 00:05:37,360 --> 00:05:41,040 Speaker 1: the Middle East, Africa, Europe, Latin America, and Asia Pacific. 134 00:05:41,120 --> 00:05:43,760 Speaker 2: The only region saved was the US because they've already 135 00:05:43,800 --> 00:05:45,880 Speaker 2: capped two price rises in the past two years. 136 00:05:45,640 --> 00:05:48,040 Speaker 1: And Jazi Boy investors have been pushing for more price 137 00:05:48,120 --> 00:05:49,159 Speaker 1: increases for years. 138 00:05:49,240 --> 00:05:51,760 Speaker 2: So when they got wind of this news, Spotify shares 139 00:05:51,800 --> 00:05:53,120 Speaker 2: popped eight percent. 140 00:05:52,920 --> 00:05:56,159 Speaker 1: Because there isn't expected to be any impact on total 141 00:05:56,200 --> 00:05:57,120 Speaker 1: subscriber numbers. 142 00:05:57,200 --> 00:05:58,480 Speaker 2: So what is the key learning here? 143 00:05:58,640 --> 00:06:01,279 Speaker 1: Pricing power is the ability of a company to increase 144 00:06:01,320 --> 00:06:05,480 Speaker 1: prices without significantly reducing demand for its product or service and. 145 00:06:05,400 --> 00:06:08,359 Speaker 2: Be man in subscription based businesses like Spotify. Pricing power 146 00:06:08,440 --> 00:06:10,080 Speaker 2: can be built on a range of factors. 147 00:06:10,080 --> 00:06:12,719 Speaker 1: For some subscribers, it might be the playlists or the 148 00:06:12,800 --> 00:06:15,840 Speaker 1: exclusive podcasts that keep them around despite the price rise. 149 00:06:15,880 --> 00:06:18,240 Speaker 2: For others, it's more part of a habit formation because 150 00:06:18,279 --> 00:06:21,240 Speaker 2: Spotify's become an embedded part of their daily life, and 151 00:06:21,279 --> 00:06:23,839 Speaker 2: with these sticky features, it means subscribers are less likely 152 00:06:23,880 --> 00:06:26,880 Speaker 2: to cancel when prices rise. This means Spotify can lift 153 00:06:26,880 --> 00:06:30,839 Speaker 2: prices incrementally while retaining most of its base. But be man, 154 00:06:30,920 --> 00:06:32,520 Speaker 2: it is a bit of a balancing act. 155 00:06:32,600 --> 00:06:35,039 Speaker 1: Yeap Raise prices too much or too often, and you 156 00:06:35,160 --> 00:06:38,839 Speaker 1: risk losing subscribers to rivals like Apple Music or YouTube 157 00:06:38,880 --> 00:06:39,520 Speaker 1: Music plucks. 158 00:06:39,520 --> 00:06:42,520 Speaker 2: An two thirty pm tomorrow, the RBA will be announcing 159 00:06:42,520 --> 00:06:44,920 Speaker 2: their cash rate decision. It might be a pause, might 160 00:06:44,920 --> 00:06:47,200 Speaker 2: be a point two five percent drop, even a point 161 00:06:47,320 --> 00:06:49,120 Speaker 2: five percent drop, and the man, We're going to have 162 00:06:49,160 --> 00:06:51,200 Speaker 2: it all here in the Flux apps. Make sure to 163 00:06:51,240 --> 00:06:52,760 Speaker 2: download the app if you want to hear about the 164 00:06:52,760 --> 00:06:53,240 Speaker 2: news first. 165 00:06:53,360 --> 00:06:55,920 Speaker 1: Thanks for listening, and we'll see you on Wednesday.