Beauty and the Feed

25:55But it could go a few ways, couldn't it? Because there'll still be plenty of people around the world making their short form videos without the approval of Disney. And if that stuff goes a bit more viral than the stuff Disney's creating, they could have a little bit of a problem, could they? Oh, yes, I can see lawyers all over this, I expect, at some point. But I mean, I think what we have seen is that creativity with the brand, with the IP does drive better content. So how you police it, I think that is the biggest thing. I just don't know how to answer that one. Alan, when it comes to Alan Thomas here, the chief executive of Ripe, so one of the country's largest providers of specialist insurance, comes to businesses looking after their own IP, the stuff that they have come up with and they've created.

26:49In the world of everything being shared that we're in these days, is that a bigger risk for a lot of businesses now, that you lose the value in something that you've come up with? Yeah, I think it definitely is. And it's been quite a hot topic, actually, within the exciting world of the insurance market and how you can insure some of these risks, actually. So historically, a lot of the big brand content creations were businesses, and very happy to ensure and very aggressively protect their IP. It's interesting now to see content creators who are often either very young or certainly not businesses in their own right, picking up content, playing around with it, and fundamentally breaching some of the tenants of IP law.

27:35So I do think it's a very smart move, actually, by Disney to think that's happening. It's pretty uncontrollable. So how do we get hold of it somehow and try and monetize it? I think this is a really smart move. So is this people taking out or businesses taking out insurance to cover the legal costs of trying to clamp down on others using their content? Yeah, well, essentially you could, especially in media businesses, you can protect against the risk. It has to be, of course, not a deliberate act, but essentially misusing someone else's IP. And then, yeah, the legal cost attaches. I think you're alluding to, Judith was alluding to earlier, can be extremely expensive.

28:14So that's what they insure against. Right. And I guess as we talk about the growth of the creator economy now, you know, it gets higher up and gets onto some of those official lists of fastest growing sectors that we have that the government will be looking at. We speak to many a person who have built careers and businesses through that realm. That must be just something that clearly didn't exist 10 years ago for the insurance industry. And you have many of these entrepreneurs needing something different from the likes of yourself. Yeah, exactly right. And I think then it's about how can you create product that does what it's intended to, but at an affordable level for the consumers.

28:55It's a bit different if you're trying to sell a product to News International as to a sort of 21-year-old influencer who's trying to just create new stuff out of content. But there's definitely ways to make those sort of things happen. And I think as those risks emerge and as the landscape develops, it's just staying close to what people are actually doing. And I think that was the point being made actually by Kevin on how Disney have been pretty smart here. Change happens and you can either sit and think that's not acceptable and we don't like it, or you can just get in and try and find a way to solve for it.

29:27Judith, it's a bit strange though, when we talk about some of the world's biggest companies, and there may be people running companies around the UK or people working in businesses that are creating this content and making this stuff, they think, well, hang on, it seems the most successful businesses out there, the biggest ones, are the ones that are just allowing everybody to use this content very, very freely. These questions over copyright, whether it is the big tech platforms, people scrolling through their Facebook and Instagram, social media feeds to the AI companies where people are just asking questions and getting answers back, creating images that are very similar to ones that a lot of hard work has gone into to create the concept of that in the first place.

30:13And you can just do it within seconds on one of these platforms. It doesn't seem like those creating the content are actually the ones most benefiting from it. The economics tend to lie with the number of eyeballs that view things, don't they? And that that isn't necessarily that content creator. And that can be the 21-year-old or it can be a corporate. So the lie of the land is really quite difficult at the moment as to how you manage to monetize that. I talked there about the size of that overall global market, but who actually ends up getting the cash when you get that content creation happening is a bit of a game at the moment.

30:50So, yeah, it's a race. It is a race. But what we can see is that it's all about authenticity in the end And I think we all get a little bit frustrated with AI and kind of fictional characters that get pushed out by AI. But we quite like what we have when we know it's a character that is actually it looks and feels real. I'd be really interested to know people's thoughts on that. 8.5.0.5.8, whether you found yourself watching more short form video as it becomes ever more established on the platforms that wouldn't ordinarily have had it in the past. of course you know it may be that you're just viewing through youtube as massively rocketed in recent years because so many have been going that way and we know as i said earlier that younger generations are absolutely starting off on that route and not particularly leaving that route as well let me know your thoughts we've had a few messages coming through on all of this we are discussing so we'll go through a few of those pop quiz what's in your kids lunchbox at whole foods Market, they've already done the studying.

31:53Over 300 food ingredients are banned from their shelves. No hydronated fats in the peanut butter and no high fructose corn syrup in the cookies. And for sandwiches, there are no synthetic nitrates or nitrites in any of their deli meat. So you can pack lunch boxes with peace of mind. Get back to school ready at Whole Foods Market. Wake up to money with Sean Farrington. Good morning. Wake up to money on BBC Five Live. It's Thursday morning, the 6th of August. Going to talk now about the consequences of those higher food prices. We heard pretty explicitly yesterday, didn't we, from Tim O'Malley, who's the chairman of Nationwide, which is one of the biggest fresh produce companies in the UK.

32:40He told us that higher prices for fresh produce would hit hospitality hardest and would hit them earliest as well. We were hearing how shrinkflation might be seen on our supermarket shelves where there are going to be fewer veg in a pack. There might be smaller veg sold for the same price as it was before because of the tough conditions that crops have been through this year. After that analysis from the Energy and Climate Intelligence Unit that warned this year's harvest could be the worst on record due to the repeated heat waves. Here's a little bit more of what Tim had to say. The sector that's going to be hit most, sadly, is the sector that's suffering most.

33:19And it's the sector that we supply heavily, hospitality. So the hospitality sector, your restaurants and your hotels, they tend to buy on spot open market price. And if I take a few examples, baking potatoes have gone up 50 % in the last six weeks. Iceberg lettuce, normally this time of year, is£5 a box. It's£10 a box. It's up 100%. Broccoli was£17 a box last week. Normally this time of year, about£5 a box. So that's up threefold. So the hospitality sector, sadly, which tends to buy on a spot open market price, maybe a monthly price, but certainly not a yearly price like the retailers, that's going to start suffering, or that is suffering immediately.

33:59The retailers are going to start tweaking the specs, but eventually the prices will go up on the shelves. Well, let's speak to somebody who runs and founded a gastropub. Stosi Maddy runs the Parker's Arms Gastropub in the Ribble Valley in Lancashire. Stosi, good morning. Good morning, Sean. Does some of that ring true? All of it rings true. All of it. Yes, I mean, we buy on a daily basis sometimes because especially now when it's the summer season and it's towards the tail end, which is harvest time, so we try to celebrate whatever is locally grown at this time of year. and those prices that he was quoting are pretty much spot on what I'm getting from my suppliers.

34:51In fact, this very morning because Thursday morning is one of the days we get our supplies in. And yes, baking potatoes, my goodness. Tell us a bit more. Terrible price. Well, I mean, it's exactly as he said. I mean, one of the reasons that they're saying these prices are like this is obviously because of the bad weather and the drought, because the potatoes have not been able to grow to maximum size. And so you're paying, you know, 50 % more for 50 % less product. But in general, you know, this is just another sort of slap in the face for hospitality because we are facing possibly the worst time I can remember.

35:33I've been doing this for 35 years and we've been at the Pakistan for almost 20 years. And I don't remember anything like this, not even the financial crash brought so much adversity to our sector. We just bashed left, right and centre with rising costs, you know, from all sides. I mean, with us as a rural pub, it's very difficult for people to get to us anyway. So you have even things like fuel costs that stop people from driving over to come to a destination pub. And now this, we've had to deal with rising costs, rising prices all the time. And of course, we can't pass that on to the consumer because there's only so much they can afford.

36:18Well, Dave's been in touch. Just literally just sent the message in as you say that. He says, prices up, people won't buy. Exactly. I mean, exactly. That's the first thing. I mean, going out is a luxury anyway when you look at it. I mean, it's only, you know, something that people do as a treat. You buckle up your belt, you buy what you can at the markets or supermarkets, you cook at home, you stay at home. We found this is happening already. This has been terrible. The last six months have shown us how people are tightening their belts even more. When they come out, they'll not have that extra starter.

36:56They'll not have that bottle of wine. They look at, they watch what they spend. And then we are making absolutely hardly zero profit on things because everything costs so much and we can't pass it on. What can you do when you if we talk about this specific issue of the food prices, just out of interest, what is that change in price you've seen on you and a baked potato? How much does that cost you differently? Well, I mean, it doesn't affect me instantly directly because we don't put baked potato on the menu. But what it does affect is general prices of potatoes for us. So, I mean, you know, bags of potatoes, sacks of potatoes have moved on from£7 to£15 a bag for 25 kilos.

37:41In what period of time is that? That has been literally in the last two years. So that's not as sudden. But the baking potato has been instantaneous. And I know from colleagues, they find it difficult. So, I mean, if they had a baked potato on the menu, I mean, I have no idea what they would sell baked potatoes for today with a topping. So I wouldn't know. But I know that that would mean that they would not be able to afford to have baked potato on the menu. If that was their primary business, it would probably be thinking really, you know, fast what to do. Which is not an uncommon sight, is it?

38:19Around the high streets of the UK, the baked spud is a key sort of feature. It's a big thing, yeah. Yeah, I mean, there might be people listening who work for one of those businesses that focuses on that, do get in touch, 85058. What can you change, Stosi, if you are running a business and if there's a specific issue like food prices and you're hearing that from your suppliers, do you start to think of menu changes if this kind of pressure is coming? Well, of course. I mean, this is the only way we've been able to survive so far because we change our menus daily, regularly, to try and suit what we can find on the market at a price that we can pass on to our customers.

39:01And it's becoming a bit of a Houdini trick. I mean, it is rare now that you will go into a pub or restaurant and find premium cuts of meat that, you know, that are just not featured as a special. You know, it's very difficult. You have to make sure you buy what is the cheapest on the market at best quality. and quality, that's another huge part because my green grocers this morning tells me, don't bother with the collies, don't bother with the broccoli, because not only are they more expensive, the quality is atrocious. And well, broccoli is a staple on greens as a side for most people that cook fresh food in pubs and restaurants.

39:44So if we drop that, we're just going to be left with things that are available at the moment. What happens later on in the year when this price starts going up even more? Because there will be no green beans, there will be no lettuces, there will be none of the pod vegetables. You rely on just the cabbages and your broccolis. I mean, and goodness me, that's going to be quite a trick to try and get that price working. Just to wrap up, Stosi, and to maybe end on a slightly more positive note, what is the Houdini trick that you've got lined up for the next few days? What's going to be the new thing on your menu that will catch people's eye that you're cooking up in your mind at the moment?

40:27Well, the flat beans, they're the cheapest thing on the market at the moment. We're going to have to find some wonderful way to dress them up and to make them look very, very tasty, you know, be very tasty because we can afford to give more of those than we could possibly of putting broccoli on the menu. It's just a matter of just looking at what's out there and working out all the recipes and using what's readily available and what your green grocer tells you. Put it on the menu. That's your best bet. Stosi, good luck with that latest delivery and good luck in the months to come. Thank you. Tell the government to cut VAT for hospitality, please.

41:06There's the shout-out at the end. Stosi, thank you. There's a budget on the way now. We've got the date, so we can start making those requests, whether they'll be listened to or not. We will see Stosi Maddy there, co-founder and owner of the Parker's Arms Gastropub in the Ribble Valley, Lancashire. Alan, how much do you have running your insurance business conversations with hospitality businesses at these times, these tough times? Yeah, we do. We look across all of the small businesses in the UK, actually, and take how they're reacting to the cost of insurance. There's a bit of a bellwether based on how they're feeling generally.

41:41and I do think the hospitality sector in particular over the last two years, I mean, it's been extremely volatile since COVID anyway, but have definitely been shouting and I mean, we just heard it there, really looking for some more support to help them through what have been some very difficult times. And as a lover of jacket potatoes, I found that particularly shocking, the last comments there. Do let us know, Alan, the next time you make a purchase, if you're noticing price pressures or changes in how it's provided. Changing tack a bit, Judith McKenzie is with us, partner and head of Dowling Fund Managers.

42:14Judith, got another story we're waking up to this morning about AI, artificial intelligence models from one of the world's biggest tech companies hacking into other companies without a specific request for them to do that, going rogue, effectively. Meta, the latest, to say that their artificial intelligence models have been heading in directions that they didn't intend them to. Getting whole, accessing the internet and hacking another firm. At what point are we going to start thinking this is a serious risk to our day-to-day business running, organisation running? I think we're thinking it now.

42:52I was going to ask Alan actually what the price is at the moment for cyber security insurance because certainly in some of the businesses that we're investing in, we're seeing that cost. It's a question we ask all the time actually, what the cost is of cyber insurance and protection. And I think, you know, as businesses are racing to deploy AI faster and faster, we're actually also trying to figure out how to govern it. All I can see is that there's probably going to be more regulation. There's going to be more compliance. And we're probably going to have compliance departments looking after AI, making sure that the right guardrails are in place.

43:27We need to have human oversight. And although there's great enthusiasm for deploying AI, I think this is a bit of a wake up call to say just be careful. but watch where AI is being deployed in your company and put some oversight on top of it. Alan, do you want to answer Judith's question? Well, I think it's fair, actually. The costs of insuring against the risk of cyber attacks have gone up as the risk has really escalated. I think this news and seeing another example, actually with a really sophisticated firm having been targeted, speaks to the fact that it's not necessarily a new risk, but the acceleration that we're seeing with AI getting involved and what it will mean for the criminal networks that actually benefit from some of these hacks in due course.

44:10As soon as they can get their hands on some of this, it's extremely scary just how much quicker and easier it will be for them to target companies. So I'm afraid there's not an easy answer. The risk is going up and has gone up significantly, and that does cost to ensure. 8505058, join in the chat with us. Richard in Colchester has been in touch, replying to Dave's suggestion that prices go up, people won't buy. Richard says, wrong. If it's explained clearly, then people will still buy. As long as they're told prices will come down again next year, if things improve. Will things improve next year, though?

44:45You've summed it all up in a sentence there, Richard. I guess we will see. Alan, can I play you a little bit of this? See if it sounds familiar to you. Game, set and match. Gala Jensen, two sets to love. 6-2, 6-4. That's not tennis. That's paddle. Is it one of your games, Alan? It is. Do you know what? Yeah, we do play at work on a Tuesday after work, actually. We've been doing that for the last 18 months or so. And it's a great sport. But I think your point coming is that it's an expensive one to play as well. How much are you guys shelling out for your Tuesday evening games? Do you know what?

45:27It can get over£100. For a court? Well, for two courts if you have them for 90 minutes. enough that I thought I'm just going to cover the cost of that for the club that's formed internally because for some of our team it was a bit of an eyebrow razor just how much it costs. Yeah, well, this is... Anyway, the reason we played that little bit of audio there is because we're nearly midway through the London Premier Paddle P1 tournament this week. So it's the first time that a global paddle tour has taken place in the UK. So a pretty decent milestone in the growth of paddle, of British paddle anyway, that we've been talking about for a fair bit on this programme now.

46:05In 2020, there were just 69 paddle courts in the UK. Now there are over 1 ,800 across more than 500 venues. And hiring a court, as Alan's given us a sense of there, usually costs between£30 and£50 an hour. Our business reporter, Daniel Thomas, has been asking players whether they think the sport is too expensive. Yeah, I've looked at the price of the courts and I just don't want to pay for it. In London, definitely, it's very expensive. You just see everyone talking about it and playing now. There's an element of pride and bragging that you can afford paddle. Yeah, finance bros. I'd love to be able to come play it two, three times a week, but then suddenly I could easily be spending a few hundred quid a month.

46:40Do you think paddle is too expensive? Probably right now, yes. I think all these clubs, they've spent a lot of money to build such good facilities and they have to get their money back somehow. I think the prices will drop. Yeah, it's very interesting that some customers see that there's investment going into it and maybe, as Richard's been in touch, you explain the price and people understand a little bit more. So that was our business reporter, Daniel Thomas, speaking with Paddle Players in London. You can read a lot more about why Paddle is exploding across the UK on the BBC websites. Have a search for his piece there.

47:11I've got Michael Graydon with us, who is chief executive at Game for Paddle, which is the largest paddle operator in the UK with 27 venues. And I think you get a sense of the size of the sport and how it's grown because Michael was also former director of Wimbledon and the former executive director at P &O. And Michael, here you are now at the top of the paddle industry. Did you ever see this decades ago? No, to be honest. I've loved the game for about 26 years, fell in love with it in Spain. But it is amazing how it's taken off in the UK. Now over 1 million players. And according to LTA research, 10.3 million people in this country want to play the game.

47:49So how much of an issue is it that price is one of the first things that does come to people's mind, particularly if they've tried it and they've experienced it. Alan, our boss on the show today, has sort of given that impression that his staff had that. It was notable when we were chatting about Paddle earlier this week on Five Live Breakfast that three of us had played but only once. And are there some issues there that people are so aware of the expense? I think it's slightly more perception than reality. Certainly at our venues, we are very much focused on being a low-cost operator charging some of the lowest prices in the country.

48:28We obviously charge a bit more in London because our costs are much higher in London, but our average across the UK is about£8 per player per hour, and that I think compares very well with many other activities or a drink in the pub. So I think it's good value because it's always four players. The cost is actually not, as it were, per court, it's per player. And is that cost, even when it's totted up to being nearer£30 an hour total, cost for the court. How much of that actually, once it's fully established up and running, are you actually making a decent return on that? Or is it still, as the final talker that we heard from the players there, still the case that is the price that high to make up for investments that have gone in?

49:14It is fair to say that the courts are very expensive. One outdoor court is £80 ,000 without VAT. You put a canopy over it,£160 ,000 per court. So it's right that operators do need to recover that. And obviously, it's a competitive market as well. So I think overall, probably prices will come down rather than go up. But there will be regional variations because, of course, rent and other costs differ where you are in the country. In your mind, for this, you've described how many people around the country want to play this and and have a go do you have a sort of price point per person that is needed to be able to see you know complete takeoff of the of the sport and that it's not just available to those that firstly can earn enough to pay for it but also you live in areas where these paddle courts have been developed yeah i mean i think to be honest the proof is in the pudding we have over 110 000 and players across our clubs in the UK, which are somewhat over 10 % of all UK players at the moment.

50:20And our venues are running at Game for Paddle at 50 % to 100 % occupancy of all available hours. And that proves to me that it is an inclusive, attractive sport for everyone. And how does it compare? When you say all available hours, are people almost playing around the clock? Is it once you've built some of these courts that they can actually be used at all times? and have you found them a good investment? I mean, it's notable Andy Murray invested in your company early on. The investment part of this is something people are a little bit interested in as well. Yes, at Game for Paddle we've very much focused, as I said, on being a low-cost operator, which means generally smaller outdoor venues maybe have a canopy on them, but we're generally not.

51:09At Game for Paddle we're building big warehouse clubs with high fixed costs And that enables us to charge low costs to customers. And it also enables us to make an attractive return for our investors. So what kind of locations are most ripe, do you think, for being either converted into a paddle court or just having something started from scratch there? There are significant barriers to entry into the market. Sweden had a sort of boom and bust, partly because it was all focused on commercial warehouses. and there are some commercial warehouse operators in the UK, but they have very high fixed costs in terms of rent and business rates.

51:49So we're looking for smaller sites, ideally at sports clubs, leisure centres, where we can get through the planning process, which is not easy, to be honest, and build attractive clubs where people want to play. You've described it in the past, investing in Paddle, as a bit of a gold rush. Can that be a danger for a sport as well or for any investment and sector that people are going into? Does it need to become more sustainable around the country? I don't know whether you see sort of rivals falling by the wayside a bit. Not yet. And to be honest, at the moment, I would say in most areas, there's insufficient, of course, for the astonishing growth in the demand.

52:32But absolutely, I think there will be peaks and troughs in the supply-demand balance. And again, Game for Paddle is very focused on being low risk in terms of the rents that we pay. So we generally don't pay a fixed rent. We share the profits with the landowner, whether it's the sports club or council leisure centre or commercial space. So we're very aware of the risks. And yes, there are a lot of people jumping on the bandwagon who think it's easy to find sites, easy to make them successful. We put in a huge amount of effort to grow programs, attract women into the game, attract juniors into the game.

53:07We run socials, mix-ins, tournaments, events, have a huge coaching program. Game Paddle alone has trained over 300 coaches because coaches are a crucial part of making the sport sustainable and attractive. So, yeah, there's a lot to do. And yes, I think the reality is there will be consolidation in the industry over the coming years. Michael Graydon thank you for your time this morning Chief Executive at Game for Paddle formerly Director of Wimbledon former Exec at P &O Judith Allen thank you for your time this morning Allen hope you enjoy your next game of Paddle next Tuesday evening Judith sport for you I've tried but I've not been selected for the Downing team yet competitive at Downing fund managers sounds like it's a bit of a workplace event as well thank you for all your messages this morning too that is it from Wake Wake Up To Money.

53:55Wake Up To Money from BBC Five Live. That's it from Wake Up To Money. You can download the podcast every Monday to Friday, so please make sure you subscribe. We'd also love it if you left us a review when you do. Get in touch. Keep the conversation going any time as well on social media. Use the hashtag Wake Up To Money. Five Live Sports. So here's the first ball of this series. All the cricket you love. Check Robbie W. Ouch. Lives on BBC Sounds. Smash straight back down the ground, this girl. Hear ball-by-ball coverage of the biggest competitions on the domestic and international circuits. It's a ball cricket and it's the huge one.

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