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Advertising revenues and economic pressures bit News Corp Australia and Foxtel Group in the second quarter despite a rise in global revenues and profits driven by its Dow Jones and Real Estate Australia businesses.
The company revealed on Thursday that revenues at the Murdoch family-controlled business rose by 3 per cent to $US2.59 billion ($3.97 billion).
News Corp Australia owns a range of local assets including The Australian, the Herald Sun and The Daily Telegraph.Credit: Rhett Wyman
Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 16 per cent to $US473 million due to higher revenues, lower costs in its book publishing business and a 5 per cent reduction in the company’s headcount.
Foxtel’s total paying subscribers fell by 6 per cent across the quarter to 4.32 million ahead of the launch of its new streaming aggregation product Hubbl later this month. Compared to the same time last year, subscriber numbers were flat. Across a single quarter, it is Foxtel’s largest drop in paying customers since introducing its streaming services.
Almost 250,000 Kayo customers cancelled or paused subscriptions across the quarter, which it put down to a “more difficult summer sports season” alongside inflationary pressures, with traffic on its news titles also down, due to what company chief executive Robert Thomson called “algorithmic aberrations” across major platforms – a trend experienced by most news websites.
Total paying Kayo subscribers as of December 31 were 1.17 million, compared to 1.4 million in the September quarter. Paying Binge subscribers rose marginally to 1.47 million, alongside another dip in Foxtel broadcast customers, which follows previous trends.
Thomson said crucial content negotiations are under way with artificial intelligence providers, while renegotiations for content deals with digital platforms at “advanced stages”. “We are not naive on possible impacts of AI on journalism,” he said.
While Thomson was confident about the prospects of “wooing, not suing” companies such as OpenAI, which is facing litigation from The New York Times, he asserted that those repurposing News Corp content without approval are stealing and “undermining creativity”.