Get smarter than your boss in 5 minutes with today's business news.
⛽️ The High Court sends a message to Volkswagen
🎤 Taylor Swift is changing the music industry one heartbreaking song at a time
🍗 Beyond Meat is in plant-based purgatory
Happy Tuesday Flux fam!
Here's everything you need to know today - in under 5 minutes.
⛽️ The High Court sends a message to Volkswagen
🎤 Taylor Swift is changing the music industry one heartbreaking song at a time
🍗 Beyond Meat is in plant-based purgatory
Something's in the water. Toshiba is splitting into three companies...and Johnson & Johnson is splitting its pharmaceutical business from its consumer products business. It's Splits-ville all around.
Background: Volkswagen are the German car manufacturers (famous for the 'lil punch buggies). In 2016, this crew got in trouble in Australia after the US Environment Protection Agency (EPA) revealed they did something very shady.
What happened: Volkswagen used sneaky software, which showed their cars produced lower greenhouse gas emissions...but in reality, they produced around 40 times the pollution limit in the US.
What else: They sold around 57,000 of these cars in Australia, so the ACCC took them to court...and they were fined $125 million. Volkswagen tried to appeal the fine to the High Court, but were rejected. This decision sends a strong message to companies thinking of greenwashing their products.
💡Greenwashing is a marketing spin used by companies to make their products seem more environmentally friendly, and therefore persuade people to buy their products.
💡 Research shows that 'greenwashing' actually harms the market for environmentally friendly products...because consumers can't tell the difference between real and fake claims.
💡But because the High Court won't hear Volkswagen's case, it's proof they ain't playing around. So companies better watch out...and better think twice...before making big calls about how 'green' they are.
Background: Taylor Swift's been making headlines - and memes - since she re-released her 2012 hit album Red a few days ago.
What happened: In 2006, Swift signed a 13-year contract with a record label, which gave them ownership of the masters (aka the original recordings of her songs and music videos) of her first six albums. In 2019, the masters were sold to another label...and in 2020, sold again.
What else: Fast-forward to 2021, and Taylor's taking her revenge. She's been re-recording a bunch of her old tunes...and these new bangers are getting a lot more attention than their older versions. So now, the royalties are back in Swift's hands.
💡The balance of power between record labels and musicians is on the shakiest ground yet...and it's largely thanks to Taylor Swift causing a royalty revolution.
💡Historically, a record label takes ownership of the master recordings. In exchange, they would produce the physical album and do all the distribution and sales.
💡In 2002, when over 95% of the music industry’s revenue came from CD’s - this was VERY important. But now, 75% of music revenue comes from streaming. And artists can literally put their song on the internet in seconds - making the role of recording labels less valuable.
Background: Beyond Meat are a US plant-based meat company that was founded in 2009. They're backed by Billy Gates and Leo DiCaprio.
What happened: When this crew went public via IPO in 2019, they had a very successful time. Fast-forward to now, and it ain't such a pretty picture.
What else: Beyond Meat revealed demand for their products was slowing down. And analysts reckon this is a sign that the company is reaching market saturation.
💡Market saturation happens when the volume of a product or service in a particular industry hits its max. Kinda like when a sponge has soaked up all the water in a sink...and it can't get any bigger.
💡At the point of market saturation, a company can no longer grow at the rate it was growing before. So, the only way to increase growth is to:
💡In this case, Beyond Meat is seeing competitors take market share away from them, which is costing them sales.
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