News Corp has increased its Q3 revenues by 5% to US$1.98 billion, driven largely by its digital real estate business REA as news and information services stabilise and Foxtel reports a flat quarter.
The results mean that news and information services revenue is now 3% down ($3.79 billion) in the first nine months of FY17 compared to FY16.
News and information revenues grew by $23 million to $1.26 billion, but much of this growth came from its US operations, including higher in-store product revenues at News America Marketing.
Advertising revenues also benefited by $21 million from the acquisition of Wireless Group and $20 million from the acquisition of ARM. These factors were partially offset by weakness in the print advertising market.
Circulation and subscription revenues increased 3% without the impact of foreign currency fluctuations, due to higher subscription pricing and selected cover price increases, which was partially offset by lower print volume.
Digital revenues represented 24% of total revenues in the quarter, up marginally from 23% in the prior year.
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News Corp Australia’s mastheads digital subscriptions were up to 333,400 (including ARM), compared to 261,500 in the prior year.
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The Wall Street Journal's average daily digital subscribers ended the quarter at 1,198,000, compared to 893,000 in the prior year.
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The biggest growth in digital subscriptions came from British tabloid The Sun, up to 80 million monthly unique users compared to 36 million a year ago.
Foxtel hit by Presto closure, sports investment
Foxtel revenues in local currency declined 3% to A$754 million but this worked out to a 2% increase in US dollars due to the strength of the Australian dollar.
This was impacted by $21 million in losses related to Foxtel management’s decision to cease Presto operations in January 2017 and a $14 million loss resulting from the change in the fair value of Foxtel’s investment in Ten Network Holdings.
In local currency, Foxtel EBITDA decreased 13%, primarily due to lower revenues and planned increases in programming costs, specifically investments in sports, such as the launch of Fox League and a new slate of programming.
Foxtel’s total closing subscribers were 2.8 million as of March 31, 2017, with closing cable and satellite subscribers 1% lower compared to the prior year period. In the third quarter, cable and satellite churn was 16.1% compared to 14.3% in the prior year.
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