News Corp reports continuing weakness in the print advertising market but says it has made a strong start to the financial year with a focus on premium content and digital.
Revenue for the September quarter fell 10% to $US2.1 billion, mainly due to the sale of News America Marketing, but also the closure or transition to digital of some regional and community newspapers in Australia and lower video subscription revenues.
However, EBITDA (earnings before interest, taxes, depreciation, and amortisation) was $US268 million, up 21% on last year.
On the ASX, News Corp shares surged. Mid afternoon they were up 14% to $21.74.
“News Corp has started the fiscal year strongly, with higher revenue in many of our segments during the first quarter, and a 21% increase year-on-year in profitability, despite the disruptive economic consequences of COVID-19," says CEO Robert Thomson.
"It is clear that the digital landscape is changing fundamentally, and the company has been an important catalyst for that change.
"The principle of a premium for premium content is now recognised, and there will inevitably be further developments in algorithmic transparency and the digital advertising market, two areas in which News Corp has been a leading advocate.
"We are continuing our drive to be a more focused, more digital company and we believe the positive results of that strategy are already clear. Our aim is to generate enhanced returns for our investors in the months, quarters and years to come.”
News media revenues at News Corp Australia fell 20%. There was a $US29 million negative ad revenue impact related to the closure or transition to digital of certain regional and community newspapers in Australia.
Digital subscribers at News Corp Australia’s mastheads were 685,200 at the end of September compared to 542,400 last year.
Foxtel’s paid subscribers were 3.287 million, up 7%, due to Kayo and the launch of Binge. At the end of September, Kayo had 644,000 paid subscribers, and 681,000 total subscribers, Foxtel Now had 298,000 paid subscribers and 310,000 total subscribers, and Binge had 290,000 paid subscribers and 321,000 total subscribers.
September quarter numbers:
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