By Calum Jaspan
Rupert Murdoch’s News Corporation has reported a drop in revenue, but sees opportunities ahead as it plans to take advantage of advances in generative AI.
The US-listed media group - which owns News Corp Australia, Foxtel Group, mastheads in the US and UK, book publishers and real estate advertising assets - said global revenue for the year ended June 30 was $US9.9 billion ($15.1 billion), a five per cent decrease on the previous year.
Earnings before interest, tax, depreciation and amortisation in the news media segment fell by 28 per cent to $US156 million ($230 million), with its book publishing division, which includes HarperCollins, dove 45 per cent to $US167 million ($256 million), thanks to a fall in book sales.
Revenues at News Corp Australia were down 15 per cent, compared to 7 per cent for News UK, which the company said was impacted by the absence of the additional week in the prior year and negative foreign currency fluctuations. News Corp Australia houses titles including The Australian, The Daily Telegraph, and the Herald Sun.
News Corp CEO, Robert Thomson said the fiscal year results highlighted the durability of the company as it battled challenging macro conditions, supply chain pressures and currency headwinds.
Thomson noted digital accounting for more than half of revenues for the first time, only to be strengthened in the age of generative AI “which we believe presents a remarkable opportunity to create a new stream of revenues, while allowing us to reduce costs across the business”.
News Corp Australia chairman Michael Miller told the WAN IFA World News Media Congress in Taipei that the company was already producing 3000 articles a week using generative AI, operated by a team of four called Data Local. Using the technology, it produces reports on fuel prices, traffic and weather.
For the fourth quarter, revenue slid by 9 per cent while the company reported an 8 per cent increase in earnings before interest, taxes, depreciation and amortisation, primarily due to cost savings from job cuts.
Thomson paid tribute to the “remarkable turnaround” by its Foxtel Group business in Australia, noting growth in both the fourth quarter and full year on an adjusted basis.
Fourth quarter revenues for Foxtel were down 4 per cent year-on-year to $501 million, with increased revenues from streaming applications Binge and Kayopartially offsetting the impact of fewer residential broadcaster subscribers.
Total paying Kayo subscribers rose to 1.4 million, while Binge subscribers remained flat across the past quarter. Broadcaster subscribers continued to fall across the past year, down to 1.34 million, while paying customers breached 4.6 million.
“Our results showed marked improvement in the second half, so with inflation abating, interest rates plateauing and incipient signs of stability in the housing market, we have sound reasons for optimism about the coming quarters,” Thomson said on Friday morning.
Revenue for the News Corp-controlled REA Group rose 1 per cent, boosted by a strong performance from its Indian business, while overall net profit was down 9 per cent to $372 million.
Revenue in Australia declined 1 per cent, owing to a challenging advertising market and a previously strong year comparatively, the company said.
REA Group will pay a dividend of 83 cents per share, fully franked.
REA Group chief executive Owen Wilson said the year-on-year performance is reflected through a strong listings environment in 2022.
“Despite the significantly lower listings in FY23, REA Group’s result demonstrates the strength and resilience of our business as customers continued to prioritise our premium products, leading platforms, and superior audience.”
More to come
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