Earnings up but HY revenues slump for News Corp Pay TV business
News Corp revenues slump 4% second quarter (Oct-Dec 2013) to $2.24 billion, fiscal 2014.
However, its Pay TV giant Foxtel earnings rose to $17m for the three months to Dec 31, from $8m in the prior year, due mainly to the News Corp’s increased ownership to 50% from 25% since 2012. Telstra owns the remaining 50%.
However, total revenues decreased to US$1.4 bn, down $148 million from $1.6 bn recorded a year earlier, for the six months to December 31.
Foxtel total subscribers hit 2.5 million by the end of last year, up 5% compared to H1 2012, which it said was driven by an increase in digital platform subscribers, including tablets and IPTV.
Churn improved to 12.4% from 14.2%.
However, earnings from the US-based media giant’s other Pay TV affiliates fell due to the absence of 44% stake in SKY sold in March last, and the consolidation of Fox Sports Australia in November 2012.
Fox Sports Australia had operating income of $42 million for Q2.
Rupert Murdoch-owned News Corp blamed revenue decline on lower ad revenues at the Newspapers including local titles, The Australian, foreign exchange fluctuations and the sale of the Dow Jones Local Media Group.
Australian newspapers revenues declined 17%, and accounted for the majority of the segment revenue decline.
News Corp’s total segment EBITDA of $327 million, a 9% rise.
Chief Executive Robert Thomson admitted “a challenging advertising market”.
“We are continuing to be disciplined on costs, while making opportunistic investments that will extend our revenue reach. The digital transformation is certainly underway, as the acquisition of Storyful and the robust growth in digital sales at HarperCollins attest.
“Digital subscriptions and website traffic are on the rise at most of our sites, and revenue at REA, the online real estate company, continues to expand encouragingly.”
