BOTW: Qantas appoints an accountant to do a marketer's job; mediocre white men; a News Corp merger?
Welcome to Best of the Week, written in Evandale, Tasmania, on Friday afternoon and Saturday morning.
Happy National Disc Jockey Day.
Today: An intriguing idea which could see a News Corp tie in with Warner Bros Discovery; Qantas’s odd choice of loyalty chief; and the ABC targets its paid streaming rivals.
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Glancing blows for Qantas
There were two piece of news about Australia’s most tarnished big brand this week.
Qantas suffered a slump on Brand Finance’s brand strength index, falling 22 places to 41st strongest. Brand Finance gives brands a mark out of 100 for brand strength based on perceptions, activity to support future strength of the brand and commercial performance in the market. Qantas scored just 71 points out of 100.
And the second piece of news, accountant Andrew Glance has been promoted to run the Qantas customer loyalty arm. He faces the daunting task of filling the seat previously occupied by Olivia Wirth, whose marketing background proved to be the perfect one for building a huge new source of value for the airline brand via its points programmes.
Olivia Wirth departed the company after being overlooked for the top job in favour of accountant Vanessa Hudson when Alan Joyce resigned.
It means the arguably two most important jobs at Qantas are now both held by accountants.
Developing customer loyalty, and locking them into points programs requires an acute understanding of irrational humans.
Whether Glance, a former accountant for Fairfax Media before he moved to Qantas in 2007, will have the instincts to build an intangible asset like loyalty, or apply the clever behavioural economics that drove much of its success it remains to be seen.
It looks like a job for a marketer, not an accountant.
Hey Siri: Show me an example of mediocre white men
In a delicious piece of writing, Jessica Sier and Nick Bonyhady delivered a perfect portrait of an over-confident, oblivious startup founder with too much Australian venture capital backing.
The reader had to work for it though. The story was told subtly, using the founder’s own words, and leaving the reader to draw their own conclusions. There’s a lot to unpack in the first two paragraphs alone.
Blackbird Ventures-backed start-up Kiki has pivoted away from the subletting business the fund once valued at $42 million, and will develop a New York “girl’s only club” to help Manhattan women “thrive” and “not just live”.
The five men who run Kiki welcomed their first female employee, 25-year-old Caitlin Emiko, who appears to have spearheaded the change, to their New York team late last year.
So, having hired their first female member of staff a month ago, these mediocre white men, led by Toby Thomas-Smith, have decided they are the people perfectly placed to understand the needs of women.
“Ever since Caitlin joined the team, she’s really enlightened me to this problem I never even knew existed where so many girls in the city have moved here thinking that they’ll live their best possible life, but they’re just living not thriving,” Mr Thomas-Smith posted.
He said he had been inspired by Ms Emiko’s ability to make friends by complimenting other women’s’ style.
She. Joined. One. Month. Ago.
The abrupt pivot draws attention to how venture capital is adapting at a time when the end of zero interest rates has tightened investment standards and forced most founders to show they have a path to profitability.
Which is a polite way of saying it draws attention to how once the venture capitalists have written the check, founders will do anything to avoid giving back the remaining funds from the $6m they’ve been given.
Formerly EasyRent, Kiki has run an invite-only subletting platform that began in New Zealand, before shutting down in that market. It then moved to Sydney, shut down, and relaunched in New York City.
Subleasing is prohibited or tightly restricted by most residential leases.
So it was a disastrous idea, and probably illegal. And has now failed three times.
Mr Thomas-Smith acknowledged the new business, Girls Who NYC, had not yet developed a revenue strategy, but said he had the support of Blackbird partner Samantha Wong.
“She was really excited as she understands how big of a problem this is but knows it won’t be solved overnight,” he said in another Instagram post.
There’s. No. Plan. To. Make. Money. I’m sure Ms Wong is excited to have her name associated with this plan to lose even more of Blackbird’s investors’ money.
He rode a rental bike through the streets of New York shouting “Tonight! 8pm!” preparing New Yorkers for the launch of Kiki’s new venture.
What marketing genius. A man shouting is definitely going to connect with his female audience.
There’s another aspect to this great piece of writing. For the last few years, the AFR’s coverage of the startup sector has been lazy and underwhelming - many of its “exclusives” in the sector come in the form of early access to press releases about successful fund raising rounds.
Just as the success of the independent Fear & Greed podcast kicked the AFR up the backside to get its act together on audio, the same seems to be happening with its startup coverage, which has got sharper in recent months.
The arrival of Scire’s Capital Brief, which covers startups with insight, appears to have been a boot up the arse for the AFR to start covering the sector with less complacency. Good.
News Corp merger rumours
Sticking with New York, media newsletter Puck floated an intriguing thesis yesterday.
A US-based media analyst is pushing the idea of a tie up between Warner Bros Discovery, Fox Corp and sister company News Corp.
The idea would see WBD, parent company of the likes of CNN, HBO, and Warner Bros Studios, buy most of Fox Corp’s entertainment businesses, including the Fox Sports and Fox Entertainment TV stations and free ad-supported TV streaming service Tubi.
Meanwhile, Fox News would move across from Fox Corp into News Corp as stay as part of the empire.
On the business level, it’s an elegant idea. Effectively, it would bring the Murdochs’ news empire back together under one roof. It was split into two companies when Rupert Murdoch sold most of the company’s entertainment assets to Disney at the top of the market five years ago.
Prior to handing over to son Lachlan at the end of last year, Rupert Murdoch had been pushing for a re-merger of News Corp and Fox Corp.
It would also be an attractive deal for WBD at the right price, not least because Tubi would give it a decent asset in the FAST TV race, and it would make it a bigger player in live sports.
In Australia, the biggest impact of any deal would be what it means for Foxtel Group. Unlike the empire’s US-based entertainment assets, the majority stake in Foxtel is owned by News Corp, not Fox Corp.
There’s an argument that Foxtel should be part of the sale and folded into the WBD entertainment assets. It would be a better fit there.
But if Foxtel stays within News Corp, then any deal would also offer an opportunity to strengthen Foxtel’s future. HBO’s studio output is a key part of Foxtel’s content, particularly for the Binge streaming service. A big deal to sell assets to WBD could include a long term arrangement to extend the HBO arrangement with Foxtel and (effectively) prevent WBD’s Max streaming service from launching in Australia.
It’s all just a theory, not a deal in progress. But it’s a good one.
Declaration of interest: through my super fund, I own shares in most ASX-listed media stocks, including News Corp
Unmade Index finishes on the rise
The Unmade Index finished the week with a flourish, rising by 1.28% on Friday, to close at 608.7 points.
ARN Media, still pushing for its proposed takeover of Southern Cross Austereo, once again saw the biggest gyration. ARN rose by 2% on Monday and 7% on Tuesday, before losing 5% on Wednesday. On Thursday it gained another 7% before losing 4% yesterday.
Meanwhile, the biggest winner yesterday was out of home minnow Motio, which picked up nearly 7%.
Seven West Media’s rise of 3.85% took it back above a $400m market capitalisation, and Domain is now back above $2bn.
Campaign of the Week: ABC iView - always free, always entertaining
In each edition of BOTW, our friends at Little Black Book Online highlight their most interesting advertising campaign of the week.
LBB’s ANZ reporter Casey Martin writes:
Howatson+Company has provided an answer to the question: "Which streaming service is actually worth it?" by giving audiences a set of witty spots.
Showcasing ABC iView’s ability to keep up with their famous paid for competitors, the spots and out of home executions serve as reminders to the Australian public that perhaps what they are looking for is right under their noses.
The campaign shows the advantages that ABC iView can offer in a clear and cheeky way.
Time to leave you to your Saturday.
We’ll be back with more on Monday, with a retail media focused edition of Unmade.
Have a great weekend
Publisher - Unmade