News Corp reported improved global revenue and profit for the company in the three months ending December 31, 2023.
However, In Australia, the News Media division saw total revenues dip 6% year-on-year.
At the Foxtel Group, revenue was up 2% from a small increase in the numbers of Kayo Sports and Binge subscribers. However, there was also an increase in sports rights costs.
Commenting on the results, News Corp CEO Robert Thomson (pictured above with News Corp Australia’s Michael Miller) said: “News Corp again saw growth in both revenue and profitability this quarter as we continue to realise the collective benefit of our strategic shift to digital and subscription revenues, and away from sometimes volatile advertising revenues.
“We had particularly robust results across the three core pillars of our business – Dow Jones, Book Publishing and Digital Real Estate Services – and believe there are strong prospects for further growth as difficult macro conditions ease in some of our markets.
“We expect to be a core content provider for Generative AI companies, who need the highest quality, timely content to ensure the relevance and accuracy of their products.
“We patently prefer negotiation to litigation, courtship to courtrooms. But let’s be clear, in my view those who repurpose without approval are stealing and are undermining the very act of creativity – counterfeiting is not creating, and the AI world is replete with content counterfeiters.
“I also want to draw attention to the plight of our colleague Evan Gershkovich, who continues to be unjustly detained in a Moscow prison, solely for being a highly professional journalist. We hope that justice will prevail and thank all who publicly, and not so publicly, have been working to secure his emancipation.”
Thomson also spoke about the impending launch of Foxtel Group’s Hubbl. He said it would improve the search experience for “our cherished customers”. He also noted it would be a strong link between the content and those consumers.
News Corp results: All amounts US$
News Corp: Second quarter results
The Company reported fiscal 2024 second quarter total revenues of $2.59 billion, a 3% increase compared to $2.52 billion in the prior year period, primarily driven by higher Australian residential revenues at REA Group, continued strong growth in the professional information business at the Dow Jones segment, increased digital sales and improved returns due to better sell through of inventory at the Book Publishing segment and a $13 million, or 1%, positive impact from foreign currency fluctuations.
The increase was partly offset by lower revenues at Move due to continued challenging housing market conditions in the US and lower advertising revenues at the News Media segment.
The Company reported second-quarter Total Segment EBITDA of $473 million, a 16% increase compared to $409 million in the prior year primarily due to higher revenues, as discussed above, lower costs at the Book Publishing segment and gross cost savings related to the announced 5% headcount reduction initiative.
The increase was partly offset by higher sports programming rights costs at the Subscription Video Services segment.
News Media
Revenues in the quarter decreased $16 million, or 3%, as compared to the prior year, primarily driven by lower advertising revenues, partially offset by the $13 million, or 2%, positive impact from foreign currency fluctuations and higher circulation and subscription revenues.
Within the segment, revenues at News Corp Australia decreased 6%, driven by lower advertising revenues, while News UK was flat as lower advertising revenues were offset by a 5% positive impact from foreign currency fluctuations and higher circulation and subscription revenues. Adjusted Revenues for the segment decreased 5% compared to the prior year.
Circulation and subscription revenues increased $12 million, or 5%, compared to the prior year, primarily due to a $7 million, or 3%, positive impact from foreign currency fluctuations, price increases and digital subscriber growth, partially offset by lower print volumes.
Advertising revenues decreased $24 million, or 9%, compared to the prior year, primarily due to lower digital advertising across the business units mainly driven by a decline in traffic at some mastheads due to platform related changes and lower print advertising at News Corp Australia. The decline was partially offset by a $5 million, or 2%, positive impact from foreign currency fluctuations.
In the quarter, Segment EBITDA decreased $7 million, or 12%, compared to the prior year, driven by lower revenues, as discussed above, partially offset by lower production costs at News UK driven by lower volume and newsprint prices and a $2 million, or 3%, positive impact from foreign currency fluctuations. Adjusted Segment EBITDA decreased 15%.
Digital revenues represented 38% of News Media segment revenues in the quarter, compared to 37% in the prior year, and represented 36% of the combined revenues of the newspaper mastheads.
Digital Real Estate Services
Revenues in the quarter increased $33 million, or 9%, compared to the prior year, driven by strong performance at REA Group partly offset by lower revenues at Move. Segment EBITDA in the quarter increased $19 million, or 15%, compared to the prior year, primarily due to higher revenues at REA Group partly offset by lower revenues at Move and a $2 million, or 1%, negative impact from foreign currency fluctuations. Adjusted Revenues and Adjusted Segment EBITDA increased 8% and 16%, respectively.
In the quarter, revenues at REA Group increased $52 million, or 22%, to $292 million, primarily driven by higher Australian residential revenues due to price increases, increased depth penetration, favourable geographic mix and an increase in national listings, as well as an increase from financial services.
Foxtel Group streaming numbers
Revenues of $470 million in the quarter increased $8 million, or 2%, compared with the prior year, driven by higher revenues from Kayo and Binge from increases in both volume and pricing, despite a more difficult summer sports season and inflationary pressures, partially offset by the impact from fewer residential broadcast subscribers and a $6 million, or 1%, negative impact from foreign currency fluctuations.
Adjusted Revenues of $476 million increased 3% compared to the prior year. Foxtel Group streaming subscription revenues represented approximately 29% of total circulation and subscription revenues in the quarter, as compared to 26% in the prior year.
As of December 31, 2023, Foxtel’s total closing paid subscribers were over 4.3 million, flat compared to the prior year, as growth in streaming subscribers driven by Kayo and Binge was offset by fewer residential broadcast subscribers.
Broadcast subscriber churn in the quarter was flat compared to the prior year at 12.9%, despite the completion of Foxtel’s migration project of subscribers off cable. Broadcast ARPU for the quarter increased 3% year-over-year to A$86 (US$56).
Dow Jones
Revenues in the quarter increased $21 million, or 4%, compared to the prior year, driven by growth in circulation and subscription revenues led by growth in professional information business products. Digital revenues at Dow Jones in the quarter represented 78% of total revenues compared to 76% in the prior year. Adjusted Revenues increased 3%.
Circulation and subscription revenues increased $24 million, or 6%, including a $3 million, or 1%, positive impact from foreign currency fluctuations. Professional information business revenues grew 13%, primarily due to 16% growth in Risk & Compliance revenues to $72 million and 15% growth in Dow Jones Energy revenues to $62 million.
Circulation revenues were flat compared to the prior year, as the continued growth in digital-only subscriptions, which benefited from an increase in bundle offers, was offset by lower print volume. Digital circulation revenues accounted for 70% of circulation revenues for the quarter, compared to 69% in the prior year.
During the second quarter, total average subscriptions to Dow Jones’ consumer products were over 5.4 million, a 10% increase compared to the prior year. Digital-only subscriptions to Dow Jones’ consumer products grew 15%.
Total subscriptions to The Wall Street Journal grew 7% compared to the prior year, to over 4.0 million average subscriptions in the quarter. Digital-only subscriptions to The Wall Street Journal grew 11% to over 3.5 million average subscriptions in the quarter, and represented 87% of total Wall Street Journal subscriptions.
Advertising revenues decreased $5 million, or 4%, primarily due to an 11% decline in print advertising revenues slightly offset by 1% growth in digital advertising revenues. Digital advertising accounted for 62% of total advertising revenues in the quarter, compared to 59% in the prior year.
News Media digital subscriber numbers
Digital subscribers and users across key properties within the News Media segment are summarized below:
• Closing digital subscribers at News Corp Australia as of December 31, 2023 were 1,051,000 (940,000 for news mastheads), compared to 1,011,000 (924,000 for news mastheads) in the prior year (Source: Internal data)
•The Times and Sunday Times closing digital subscribers, including the Times Literary Supplement, as of December 31, 2023 were 575,000, compared to 550,000 in the prior year (Source: Internal data). The previously disclosed methodology change resulted in a 59,000 and 61,000 increase to the closing digital subscriber number at December 31, 2023 and 2022, respectively
• The Sun’s digital offering reached 143 million global monthly unique users in December 2023, compared to 194 million in the prior year (Source: Meta Pixel)
• New York Post’s digital network reached 124 million unique users in December 2023, compared to 141 million in the prior year (Source: Google Analytics)
See also: News Corp Q1 2024 – Group profitability strong with growth and challenges in Australia