Showdown in Davos

26:09So it's important, but it's not everything. Well, in terms of those rates, give us a look ahead before we let Richard go as well, Lindsay. What are you expecting? We've got the inflation numbers out at 7 o 'clock this morning from the ONS. What should we all be looking out for? I think we're likely to see it tick up very slightly in the month, actually to 3.3 % from 3.2 % last month. But there's nothing really under the hood that's changing here. We are still seeing a disinflation story. so falling rates of inflation in the UK over time. The reason it's ticking up this month, or likely to, in expectations, is higher airfares and also an increase in tobacco duty.

26:46But this is coming down to the moment in time at which prices are collected. Yeah, there's some quirk with the airfares, right? Yeah, that's right. So we don't know specifically which date that they'll be collecting data on. I think one option is like the 9th of December, one option is the 16th of December. Clearly, airfares are an awful lot higher that week before Christmas than they are early December. So that's definitely the main quirk that's potentially pushing up inflation. But overall, we're seeing positive signs that inflation could actually fall back more quickly than the Bank of England are forecasting.

27:18They're already saying two and a half percent by the end of this year, but we could see it come down more quickly. There's a few reasons for that. But either way, it would be helpful for interest rates if that was to happen. Alan, insurance obviously a very kind of inflation sensitive industry, anything that still makes your eyebrows hit the ceiling in the data at the moment? Well, I think we've just called it the interest rates and we keep a very, very close eye on. And yeah, just generally inflationary pressures. There's a bit of supply chain for us in our claims where sourcing pieces for boats or motorhomes plays in.

27:52But actually more importantly for us is that consumer confidence. So as I said earlier, there's a lot of ad products where there's a bellwether element to them of how consumers are feeling. It's a disposable income they'll be spending that will be insuring the asset. So, yeah, that's often something we can see showing up is just how the consumer reacts to that type of news. Richard, quick thought on the picture here and then also round us out with are you getting your popcorn ready for the Trump speech later on today? I'm actually going to avoid the Trump speech, to be honest. I've got a couple of meetings on the other side of town and, you know, it will be chaos.

28:28The traffic here is always chaos. But with the security around Trump, the sort of centre of Davos will be in lockdown for at least a couple of hours. So I'm going to avoid it. And actually, I'm seeing some interesting British business leaders instead. So, yeah, one of my colleagues has got the joy of fighting her way into the Congress hall and getting through the numerous security checks I'm sure there will be before she can get into the hall. Well, we'll look out for your chats with those leaders in the Times in the coming days as well. Thanks so much for your time this morning. Thank you. Richard Fletcher, business editor at The Times newspaper there.

29:07Plenty more from Lindsay and Alan in the second half of the programme here on Wake Up To Money, where we're going to be talking Netflix. because alongside its latest financial results, it's been sketching out the latest part of its bid to buy Warner Brothers Discovery. And we're going to be talking about what's going on with the UK small music venues as well as more than half made a loss last year. Wake Up To Money with Will Bain. Morning. Welcome back to Wake Up To Money on Wednesday, the 21st of January, where our panel this morning are Alan Thomas, the chief executive of Ripe, specialist micro insurance firm, and Lindsay James, investment strategist with Kit Welter Investors.

29:41Do keep your texts coming in. Got a nice one here from Kev the Milkman in London about something we're going to talk a little bit later on in Wake Up To Money about, the crisis it seems at our small music venues because the Music Venue Trust has released its annual report on grassroots music venues, has surveyed more than 800 of them and found more than half failed to make a profit last year and that the number of jobs at venues like those had fallen 20 % in the last year. So we were asking really your thoughts on what's going on there. Are you going a bit less? And what makes a great small music venue, and perhaps some of the bands you saw there before they were big.

30:17And Kev, as I say, the Milkman in London, has been in touch saying, small venues in my youth. I went to the legendary Marquis in Wardour Street, the Hope and Anchor in Islington, and the Borderline. I saw Suede there in a support slot, playing to about 100 people. In my hometown of Harlow, we had a wonderful venue called The Square, which we sadly lost about 10 years ago. Saw the likes of Billy Bragg, Benjamin Zephaniah, and the dam there in the 80s. You really can't beat a small sweaty venue when you're almost on the stage with the band. And with the advent of YouTube, you can now check unknown bands before going to see them, says Kevin.

30:48Lindsay, were you a small venues gig person? Well, I grew up in South Devon on the coast. So to be honest, there were no big music venues. But absolutely, yes. You know, it was a really important part of my youth. I wish I could still be doing it, but, you know, my age and my family life is a little bit more limiting, but it was great before you could go out, you know, to clubs or pubs or anything like that, that there was a place to go. So, yeah, it was a really vital part of life. Alan? I've just been racking my memory, actually. Well, I'll give it how long it's been. I think genuinely the last live performance I saw was Massive Attack, but that was at the O2 Arena, so that can't count in any shape, I'm afraid.

31:26But that is part of the story here, isn't it? The sort of takeover of the mega gig, I guess, and people playing like more and more nights as well, right? Yeah, I think so. and also the emergence and continued popularity of festivals as well means that's a big spend for people. So looking at the way my kids do that stuff, they'll go to the Brixton Academy, but again, it's not exactly a small venue. Yeah, really interesting. That's a good point that Alan makes as well. Is that perhaps something that you think is drawing you away, that you'll wait till later in the year for that big spend and go and see a whole load of the bands you like at one of the many festivals around the UK as well?

32:00850508, we'd love your thoughts before we get to that story in about 10 or 15 minutes time here on the programme or 08085 909693 is the WhatsApp. We're going to return, though, to something that's been, well, it's sort of a saga, isn't it, that could reshape Hollywood. And Netflix overnight has been telling its investors its$83 billion deal to buy Warner Brothers Discovery would strengthen the marketplace and ensure healthy competition in Hollywood. The Netflix co-chief executive, Ted Sarandos, made the comments during his company's latest financial results where he said Netflix had also made progress towards securing the necessary regulatory approvals for its improved all-cash bid for Warner Brothers.

32:37That was something it had announced earlier on Tuesday. Brian Weiser joins Alan and Lindsay now. Brian's the principal at the advertising and media consultancy Madison & Wall, joins us from Portland, Oregon on the US West Coast. Brian, evening to you, morning from us. Good morning to you. Why don't we start with the new bid first of all then, your take on that? Well, it's really just a minor modification in the grand scheme of things. shifting to a cash bid. This was expected. It's basically still the same deals we had before. There's still the stub of what is called the global networks business, including CNN and TNT and Cartoon Network and other networks that you certainly wouldn't even get in the UK.

33:15That's still getting spun out to a separate entity as they've been planning for a while. It's still not clear that Netflix has the winning bid here because Paramount's still going to be chasing this through a proxy fight. They still have a regulatory advantage, probably. It's really hard to say how this plays out. Lindsay, just explain to people all cash, as Brian says. Why, from an investment perspective, is that more enticing? Because they haven't actually upped the total amount of money they're offering here, have they? That's right. It just gives investors an awful lot more certainty about what they'd actually be receiving.

33:45Because if you're being offered shares as part of that mix, of course, you don't quite know what price that's going to be nailed down at. So, Brian, the other thing that Ted Sarandos said that caught my eye, that he was basically making this argument and sort of preempting, I guess, the fight that they may have with regulators, if indeed they do secure this tie up, saying we've got a relatively low share of US TV time, i.e. how much households are watching. Does that wash with you? Well, yes and no. I don't think that that's going to be the be-all and end-all. It is safe to say that at peak, some of the broadcast network groups in the United States would have had more than that.

34:28So that's not so much of an issue. I think you could say certainly many countries where they'd have regulatory assessments. Again, the public service broadcasters will almost always have bigger viewing shares. NITV will have a bigger share in the UK than Netflix. So I don't think that it's necessarily um it's not wrong um but it's not the big issue the big issue is do the ellisons have more sway with the white house than netflix well the secondary big issue right as well is is it's about the content isn't it and it's about how much control of the pipeline of that content they would have i mean you could make that argument but at the end of the day i mean this is arguably they're expanding by adding a studio they're adding hbo which is relatively minor at the same layer of the industry.

35:14Given how much the studios, traditional studios have underinvested, I mean, you could argue that Netflix plus Warner is not bigger than the biggest studios would have been in the 1990s. Lindsay, what's your take on those arguments? Well, you know, I think there's a lot of sense there. And I think investors are really focused on the fact that Netflix just hasn't done this before. They're not known for M &A, they're known for organic growth. And then you've got the political arguments too. It puts Paramount in a really strong position. Alan, play our role as TV viewer, punter, consumer here. Do you care particularly or do you worry that it could, fewer players, higher prices, perhaps fewer films in the cinemas?

35:59No, I probably overspend actually on streaming services, if I'm really honest. And I always do feel a little bit guilty because I'm not saying this just because we're on Radio 5, but I do like to come back to the iPlayer and get that BBC content. But no, I don't personally see it as a viewer as having a material impact. And that's an important point here, Brian, as well, isn't it? That this has been a sector that's been growing so fast, massive financial arms race for years now. It's kind of been due a bit of consolidation, hasn't it? Yeah, well, I mean, I think that's safe to say. But again, it's really important to keep in mind the separation between the studio layer of the industry and the package, as we call it, layer of the industry, right?

36:35the entities that have the interface with sub-distributors or directly to consumers and advertisers versus the studios. It's different. I think it's safe to say, though, that the Paramount-Warner combination, that would lead to destruction in terms of economic activity. I'm not saying it's negative necessarily, but there would be less production, less output, because they're basically the same business. Right. Just explain that. Netflix is not. Well, Paramount and Warner's studio business are practically the same industry. They're much more similar than different. They have studio lots. They have a similar business model.

37:13Certainly when you combine the cable networks business, the former MTVs and the CBSs and combine that with the CNNs and all those, they're way more similar. And so you will end up with, well, for lack of a better word, one plus one will equal about 1.5 and you hope that the profit goes up in consequence. Interesting. So just sort of your sort of temperature check then of people across the industry, Brian, then about what they would like to see and how they would like to see this resolved. Is there a consensus for you, do you think? Well, I'm not in Hollywood and I don't consider myself to be of Hollywood.

37:49I think it's safe to say that the more traditional Hollywood types actually prefer the paramount combination, but I think that's completely misguided. I mean, they're looking at through the lens of the purity of the theatrical release and the connection to Hollywood. And there's this disdain for streaming because if you're consuming content at home, it can't possibly be as pure as going to a cinema. I think that's ridiculous. So that vantage point says Paramount's better. But I think the reality is that if you want to actually live as an industry, you'll kind of want to be on board with Netflix.

38:24With that said, it doesn't matter because what's right, what's good economically is probably not going to be the deciding factor here. And Lindsay, how far away do you think we are? Is that a piece of string here? Well, I mean, today we're going to, it's the closure of whether you want to tender your shares or not to Paramount. So, you know, we should here quite soon about what that looks like. So, I'll give you a better idea of what shareholders think about this idea. But I also think what we might see following this is maybe we're going to have to see bids going up. This hasn't ended yet, and investors ultimately want to get the highest price for those shares.

39:06Brian, what do you reckon? And the proxy war, that's the next step, because at the end of the day, they could very well, again, you absolutely agree, higher bid and a proxy war, change the board of directors, so Paramount still has a chance there. And if it doesn't happen there, then you play the regulatory card and you play the political favors. This is Paramount's to lose, probably, but it's also still very possible and plausible that Netflix wins. But nobody really knows how this plays out. It sounds like we're going to have you back on again, Brian. So thanks as always for your time. Brian Weiser, Principal at the Advertising and Media Consultancy, Madison and Wall in Portland Oregon there let us know what you think are you worried about what it might do to prices of your subscriptions or are you worried about do you have a different view or the Hollywood view I suppose as Brian was sketching it out there as well about what it might mean for cinema releases or do you want to see great films and you don't mind whether you see them at home or in the cinema 85058 if you want to get in touch with us about that Alan wanted to get your well yours and Lindsay's view on this one as well because it's been a big market story this week, I guess, Lindsay, hasn't it?

40:14Zurich Insurance approaching Beasley, one of our big stock market listed specialist insurers. Why don't you sketch us over the deal, first of all, Lindsay, and what's being proposed. And then, Alan, I'd love you to kind of sort of pick through what you think is going on here and why. I'm afraid you'll have to go to Alan on that one, because that's not one I've been briefed on. Sorry, Alan, go ahead then. Yeah, I'm happy. It's extremely lively in my world of insurance. I'm happy to chat on this one. Yeah. So just the background very briefly, Zurich have been chasing after Beasley, as you've said, one of the leading specialist insurance companies that we've got in the UK and in London.

40:50In fact, one of the reasons it's particularly interesting to Zurich is it's a very internationally diversified business as well. So very well known in the market for high quality people, ensuring difficult risks, but doing so extremely well. So a very attractive asset. And that's why I believe Zurich have been chasing. I think this is the fifth bid they've put forward over the past year, and they're valuing it at about a 56 % premium against the recent share price. So I think the short version, this is not the only bit of consolidation that's been happening in big insurer land. So listeners might know that Aviva bought Direct Line Group through last year.

41:27There's a lot of consolidation going effectively as big insurers chasing scale, but also in this case, seeing a chance to diversify. And I was reading something in the FT last night, Alan, which I'll be blunt, I didn't understand the importance of, but looking as well to sort of float bits of this through Lloyds of London, the big kind of insurance broker in the city of London there. What are they trying to do and why? Yeah, it's not actually, look, it's not very well understood. Lloyds of London is actually a marketplace. So without doing the history lesson, founded in a coffee house in the late 1600s, and essentially groups of underwriters come together and form syndicates.

42:04So if you've ever heard of Lloyds syndicates, That's a group of underwrites who come together and pool their assets to ensure other people's risks. And that has been not only foundational in a lot of the insurance market globally, but it's remained a market leader internationally. So to be in that marketplace, to have people that know their way around it, to have data that helps you underwrite within it is a real unique play. And so people like Zurich who don't have that today will be desperate to get in there. Interesting. And so does it sort of bring us back a little bit to what you were talking about with some of your AI products then as well in terms of the specialisms here?

42:35This is about really being able to offer really specified insurance to customers down the track. Yeah, exactly. So Beasley were one of the first markets to get heavily into cyber insurance, so insuring businesses against the risk of attack or ransom, that sort of stuff. So they're very big in that. Marine's another big market, which again is highly specialist. So yeah, it would give a player like Zurich, who's got scale already, access to markets they just don't get access to today. Really interesting. Yeah, one we'll keep watching on the programme as well. I'm sure we'll be tapping up Alan for his expertise on that as we move forward as well.

43:06And hopefully you can see why that one may be of interest to you going forward as well. Nine minutes to six here on Wake Up To Money. Here's a bit of a pop quiz for you at that time in the morning. What links these four artists?

43:36Not an obvious linkage, is there? Pretty diverse. Bastille, Motorhead, Poor Young and Youngblood, but they're all artists who performed at the Horn music venue in St Albans, and it's one of 800 grassroots music venues surveyed by the Music Venue Trust in their latest report. And the report found the number of jobs at venues like that have been falling 20 % last year, and that many of those venues are struggling to make money. In fact, half of them made losses last year. So what is going on in the sector? We're going to be joined, Lindsay and Alan and myself, by Luke Hinton, promotions manager at The Horn, and by Kerry Jones, the manager at the Factory Live Grassroots music venue in Worthing in West Sussex as well.

44:16Morning, both. Morning, Will. Good morning. Kerry, first of all, the numbers then, I mean, is it as bleak as the Music Venue Trust is sketching out? I mean, it's certainly very difficult. We are amongst the venues that aren't reporting a profit at the moment. So, yes, there's no doubt that the combined cost pressures that we're facing, coupled with the cost of living issues faced by our customers, are combining to make a pretty tricky picture at the moment. Luke, is it similar where you are? Yeah, I don't think we're in as bad a situation as many, but that doesn't mean that we're not on a cliff edge, obviously, with the changes that are obviously imminently coming in as well.

45:01Right. Is that business rates you're talking about there? Business rates, national minimum wage increases as well, national insurance increases that have come in. They're all obviously having an impact on the margins that we have. Kerry, is that what's squeezing at the factory as well or are there other things too? Yeah, and I think we're all still recovering from COVID and cost of utilities, generally inflation. it's just the combined uh um you know picture i think of that and you know much like uh luke we're not as bad as we're not in as difficult a situation as many others but i i don't imagine there's many uh small independent live music menus out there that are uh are not in this situation yeah luke alan who's on our panel this morning was speculating about this earlier and i wondered whether it was there was something in it about the sort of explosion of festivals has that sucked up the kind of ability to get smaller bands through the kind of UK small venue circuit because people think, oh, I've spent a lot of money, I can see a whole bunch of them together in a festival in the summer.

46:12There can be an element of that. I think it is something, obviously, festivals are fantastic things. There's lots of amazing festivals for local communities as well as the larger ones. But yeah, the higher ticket price ones can mean that when people's income is squeezed that they're going to potentially choose to go to one event where they can see multiple artists rather than lots of smaller events in small venues or grassroots venues. So it is that thing of, yes, that can have an impact. But I think it is a cost for customers generally. I think that's the thing which is maybe having an impact that people will pick and choose what and when they go to things.

46:47Yeah, Alan, come in on that because your kids are a gig-going age, aren't they? How much does it cost? How much is it availability? It's extremely expensive. It's birthday present territory in our house. And yeah, I do think watching them, they'll weigh that up against the ability to go out regularly to some of the smaller venues. And they're a bit lucky living in South London. They can go over to Brixton where there's some great venues to go to. But yeah, the cost is very, very material. Carrie, that doesn't seem an easy thing to solve. No, it isn't. I mean, you know, it's got to be a combined approach to try and solve it.

47:21So for us, it's about balancing the programme. It's about balancing the risk taking. we're still fortunate that we're able to offer a programme which includes young and emerging artists and you know that's really important to us as is to be part of our local community but there is more that we can do and there is more that we would be doing if the financial stacked up. Is there appetite from the artists as well Kerry because we hear lots don't we about how with the explosion of YouTube in particular, but all social media, that, you know, artists can kind of get a start by just sort of, and find an audience just by putting their music up on the various social media sites and perhaps don't have to, you know, hit the gig scene hard in the way perhaps 20 years they did?

48:10I don't think we really find that. I think we find that, you know, part, I think, of, you know, the draw of being an artist is the live experience. And I think particularly in a small venue that you just can't match that on YouTube. So I think the appetite is there and I think that the constraint is not coming. I don't know if Luke would agree, but certainly we're not finding that. Luke? Yeah, artists want to play, essentially. That's what they're there to do. They grow their careers by doing that and that's where they build their audiences who buy or listen to their music. I think the issue that's coming is about their affordability to get out and play.

48:49is that so it becomes an issue that they don't necessarily go to as many places as they used to because the cost of getting there increases the cost of staying in a hotel so i think what we're seeing is that the fewer fewer locations are getting shows so it might be the artists are sticking to to major cities and i think one of the key things is that there's the independent promoters out there are actually pushing it to further to greater audiences and putting it into places that don't necessarily get that as much live music as they perhaps used to yeah and Lindsay you were joking about this earlier it's a bit of a rite of passage for younger people too isn't it oh definitely you know and it was so I mean we have so many happy memories of seeing those bands that Fern Cotton is now having on her show new Ocean Colour Scene and Cast and Cooler Shaker none of them were the major artists of the day but we didn't care it was a brilliant night out.

49:41How do you turn it around then Kerry do you think? Well I think you know we can do what we can and we are doing what we can. We have for example a very well developed volunteer program at our venue which helps us to address some of those cost issues with our lean staffing structure but you know there are some external you know inputs that could help extending the business rate of relief or the reduction that is currently being looked at for pubs could be extended certainly throughout hospitality or to all businesses in terms of VAT, maybe looking at certain VAT relief. So the Music Venue Trust have set up a grant scheme and that's something that we've yet to investigate, but we will be looking for external funding.

50:35So, you know, many things that can make a difference, but they will all add up to, I think, have a real impact if they can be put in place. And Luke? Yeah, I agree. So the business rates review is obviously a major factor. Obviously, the increase is going to put pressure on so many. And I think even the sort of period of time where the transition's coming in, it's in three years' time. All we're doing is kicking the can down the road as the venues are going to face the pressure of that. But then, yeah, NVT and the Association of Independent Promoters doing the Liveline project, which has come from support from artists like Coldplay, which is obviously that's going to be invaluable to get artists on the road.

51:17Giving it back as well. But it has to come from government. It's literally, there has to be that pressure to make sure these things don't close. Well, good luck with it all. And a lot of love for venues from Stockton-on-T's to the Woodstock Social in Oxford on our text as well. Luke Hinton and Kerry Jones, thanks so much for your time. And big thanks to Alan Thomas and Lindsay James as well, and to all of you for listening to Wake Up To Money. Wake Up To Money with Will Bain. Five Live Sports. Let's get the show on the road on Rod Laver Arena. Good morning, good evening from Melbourne. The Australian Open.

51:51How are they both feeling? The nerves, the tension, what's at stake? Unbelievable. What a ride. Between now and the end of the tournament, We will bring you a daily pod recapping the biggest stories and the best of the action on the All About Australian Open feed. The Australian Open 2026. Join us for our live coverage on Tennis Breakfast every morning from 7am on 5 Sports Extra and BBC Sounds.