Foxtel puts News Corp at the mercy of falling revenues

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Rupert Murdoch's News Corporation is on its way, once again reporting a loss – $ 306.7 million for the September quarter – in stark contrast to the positive result of $ 186 million in the same period last year.

The entire News Corp group has actually lost value since Murdoch split his empire into News Corp (newspapers and Foxtel) and 21st Century Fox (film and international television) in 2013.

Then the news was valued at $ 23.95 billion, while six years later. was down 1.6 percent on September 30th

Australia was one of the drivers of the loss, with the company claiming to have been hit by "challenges in the Australian housing market" and "lower revenue from Foxtel subscription".

Unless otherwise stated in millions of US dollars

The Foxtel owned by 65% ​​is an ongoing plague, with News Corp having to cash another $ 200 million in the quarter to bring its total loans to Foxtel to $ 700 million. Foxtel's total debts amount to $ 2.3 billion and News announced a debt restructuring in the coming weeks to try to put the group on a firmer financial base.

A debt transfusion for Foxtel

Refinancing "will include a package of bank refinancing, third-party financing and additional equity financing," News Corp. financial director Susan Pannucio said in an investor call on Friday.

Foxtel was struck by the advent of video on demand services, such as Netflix and Stan, which undermined its programming monopoly beyond free-to-air TV. Excluding the effects of currency movements, Foxtel's revenues fell 3% due to "subscribers of lower transmissions and changes in the subscription package".

This means that fewer people choose Foxtel and those who opt for cheaper offers. The fall in registrations is partially offset by the growing number of subscriptions to the Foxtel Now video-on-demand offers and its sports partner Kayo.

But they are cheaper than the traditional offer and overall "revenue per unit (subscriber) has fallen from $ 100 to $ 78 in recent years," said independent media analyst Peter Cox.

Gifts hit revenue

On September 30, Foxtel had 3.06 million subscribers, an increase of 6% "due mainly to the" launch of Kayo and the modest growth of subscribers to Foxtel Now ", the company said. However, some of these new subscriptions do not generate revenue, with 66,000 people using the free service.

Attempts to increase Foxtel season ticket prices have not been a complete success, with a 14.4 percent increase in subscribers compared to 12.9 percent the previous year. This abandonment means that more people have abandoned the Foxtel membership when prices have risen.

Saving Foxtel seems to be a bit of a neglected cause for News. "Telstra (which owns 35%) will not invest money and will continue to relaunch the channels and change its name," said Cox.

"But the horse has escaped" with the advent of video streaming services, Cox added. "It's the same with unencrypted television as people have other forms of entertainment and other ways of watching TV," said Cox. "It's a vicious circle for Foxtel."

Newspapers suffer

The traditional information and information activities have recorded an increase in advertising revenue of 5% compared to a year earlier. His Australian operations, which include names like The Daily Telegraph, Herald Sun, L & # 39; Australian is Courier service, were down 11%.

Newspapers are no longer what they used to be. Photo: Getty

There was weakness in the printed advertising market "mainly in Australia," the News said. While the number of print readers is decreasing, digital subscriptions were 542,000 as of September 30th compared to 442,000 the previous year.

UK mastheads included Times rose 49,000 and the Wall Street newspaper digital registrations increased from 300,000 to 1,584,000, an increase of 17%. The Dow Jones information business also saw an increase in subscription revenues.

Falling newspaper revenues "surprised me because they have good mastheads," said media analyst Steve Allen of Fusion Strategies. News Corp's future was under a cloud because of doubts about the economies of Australia and the United Kingdom and concerns about trade in the United States, he said.

The new newspaper is owned by Industry Super Holdings

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