Happy hump day, Flux fam!

Here's everything you need to know today - in under 3 minutes.

Today's big stories:

💰 Netflix will finally pay tax on Aussie subscriber revenue

🗞 Seven invests $10 million into Raiz

📱 Facebook's been told to sell GIPHY

Oh and get this..

Elon Musk's warned SpaceX staff that the company is facing a genuine risk of bankruptcy if it can't fix its rocket engines by next year. Talk about a kick up the backside!

Netflix will pay tax on its Aussie subscribers from Jan 2022... and welcome to adulthood

Background: Netflix have around 6 million Aussie subscribers...and it's estimated they earn more than $1 billion in revenue from these subscribers. Cash cows, we are!

What happened: So far, Netflix have been funnelling this revenue through a subsidiary company in the Netherlands. And so they paid a measly $550,000 in tax last year...(which doesn't sound like 30% corporate tax to us).

What else: From January 2022, Netflix will convert its Aussie streaming support business to a local entity, which means subscription revenue generated here will be recognised here...and they'll likely pay loads more tax.

So what's the key learning?

💡Multinational companies operating in the digital space often rort local systems by switching their corporate structures. 

💡It ain't against the law, but it is a loophole, and it means the Aussie economy is missing out on potentially billions in tax from big companies.

💡But now, this move could put the pressure on others like Google, Amazon and Meta to declare their local revenue here.

Seven's given Raiz $8 mill of free advertising then rounded that up to the nearest 10

Background: Seven West Media are one of Australia's biggest media business. They own Channel 7 (and all their subsidiaries) as well as newspapers and online publications.

What happened: On the other side, we've got Raiz, the micro-investing platform where customers can round-up their purchases and invest into a portfolio of shares. Two very different businesses.

What else: Now, Seven are taking a strategic investment of 6.6% in Raiz in exchange for $2 million in cash and $8 million in advertising across Seven's channels.

So what's the key learning?

💡Media for equity is an investment model where a company gets media coverage in exchange for shares in their company.

💡Marketing campaigns can be hugely beneficial for companies, because they help build awareness about the product...but they cost a bucketload of money. 

💡So, the media for equity model allows companies to get advertising, without impacting their cash flow. It works for media companies too, because they often have TV spots that haven't been filled. 

Meta's been told to give up GIPHY and The Zuck ain't happy about it

Background: Meta own a tonne of different companies. We've got Facebook, Instagram, WhatsApp, Oculus (to control the metaverse, of course) and GIPHY. The app you wish your parents never found out about.

What happened: Even though UK regulators initially approved Meta's acquisition of Giphy, they're doing a full 180.

What else: They reckon Meta is controlling access to GIPHY's GIFs, and this is affecting the digital advertising market (coz everyone wants a gif). Now, the watchdog is ordering Meta to sell GIPHY ASAP.

So what's the key learning?

💡Meta have managed to maintain market dominance in the social network industry with a buy or crush approach.

💡They identify rivals in their early growth stages...and try to acquire them (i.e. Instagram and WhatsApp) and if that don't work, just flat out copy and squash them (Snapchat with Stories...or TikTok with Reels).

💡But the regulators are finally catching on. This latest move in the UK is an example of regulators finally getting some teeth, and sinkin' them into Meta.