Published: Sun, August 12, 2018
Business | By Eloise Houston

News Corp chief backs Foxtel despite subscription revenue fall

News Corp chief backs Foxtel despite subscription revenue fall

Earnings (before interest, tax, depreciation and amortisation) over the three months was down 39 per cent compared to the same time in 2017 due to the revenue hit, increasing programming costs for major sports and $US10 million in additional transition costs.

However, the media group still posted a $US1.4 billion loss after writedowns, mainly due to Foxtel in Australia. "With robust performance across our businesses, and positive and profound changes in the character of our revenue flows, which were more global, digital and subscription-based".

Under pressure Foxtel has managed to hold onto subscribers with the pay TV operator now undergoing a transformation program under the new management after a $33M revenue drop.

"Despite healthy trends across the board for News Corp., sports costs and ongoing investments in its Foxtel cable network segment for a new sports-streaming product may pressure margins through fiscal 2019", Bloomberg Intelligence analysts said in a report Friday.

In Q4, the company's revenues grew 29% year-over-year (y-o-y) to $2.7 billion, primarily due to continued growth in the Digital Real Estate business and broad growth in other segments as well.

The company's goal for its combined Foxtel and Fox Sports Australia business continues to be an initial public offering (IPO), she and News Corp.

CEO Robert Thomson reported confidence that new rights acquisitions, including cricket, would lift subscriber numbers at Foxtel. As a outcome, the company is focused on driving higher penetration of digital paid subscriptions, particularly in Australia and at News UK in fiscal 2019.

"HarperCollins' success underscores the importance of intelligent editors and great writers in creating premium content. Mastheads like The Times, The Sunday Times and The Wall Street Journal reached new heights in their digital transformation, with digital paid subscribers now exceeding print subscribers", he explained. The decline was partially offset by the growth in digital advertising revenues at News Corp Australia and News UK, increase in advertising revenues at Wireless Group and the positive impact from foreign currency fluctuations.

Australian pay TV company Foxtel, which Rupert Murdoch-controlled News Corp acquired earlier this year, contributed $610 million to News Corp's overall revenue in the fourth quarter ended June 30.

"We are marking five years since our separation and are confident News Corp has a lustrous future, built on a strong digital and global foundation".

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