News Corp today released its first quarter Fiscal 2023 results for the period ending September 30, 2022, including subscriber highlights for the Foxtel Group and financial results for the Subscription Video Services segment.
Commenting on the Foxtel Group at News Corp’s Q1 FY23 Investor Briefing this morning, News Corp Chief Executive Robert Thomson said: “At Subscription Video Services, Foxtel had another strong quarter. Streaming subscriber penetration continues to expand, and costs have been thoughtfully controlled. Foxtel has recently renewed or signed valuable long‐term sports rights and content agreements, including the AFL, WWE and NBCUniversal. We have obvious optionality at Foxtel, where the conversation is no longer about how much capital we plan to invest – but the potential for capital return.
Subscription Video Services Segment Highlights
- Adjusted* First Quarter Revenues for the Subscription Video Services segment grew 6% continuing the growth experienced in Q4 FY2022 (4%) with higher streaming and advertising revenue more than offsetting lower residential broadcast revenue.
- Adjusted Segment EBITDA in Q1 rose 5%.
Key Foxtel Group Subscriber Metrics
Total Foxtel Group subscribers increased to 4.605 million (4.465 million paid), a record high, up 16% on the prior year.
- Total streaming subscribers, including Kayo Sports, BINGE, Foxtel Now and Flash reached 2.947 million (2.807 million paid), up 34%.
- Streaming subscribers represented 64% of the Foxtel Group’s total subscriber (55% in Q1 FY22).
- Kayo Sports reached 1.270 million subscribers (1.259 million paid), up 18%.
- BINGE reached 1.451 million subscribers (1.342 million paid), up 64%.
- Foxtel Now reached 197,000 subscribers (191,000 paid), down 18%.
- Flash, launched in October 2021, reached 29,000 subscribers (15,000 paid).
Foxtel residential and commercial broadcast subscribers were 1.658 million, down 6%.
- Foxtel Residential subscribers declined to 1.439 million.
- ARPU was A$83 through a continued focus on Foxtel’s premium brand positioning.
- Residential churn was 14.2%, rising 40 basis points compared to the fourth quarter, and
- 20 basis points higher than the first quarter FY22.
“Foxtel’s streaming services attained 2.8 million paying subscribers as of the end of September, surging 34% versus the prior year and accounting for 63% of the total paying subscriber base.
“Kayo and BINGE added nearly three quarters of a million paying subscribers in the past year alone, underscoring the potential of Foxtel in a still‐expanding Australian market. Foxtel Group delivered record audiences for the recent AFL and NRL finals. Meanwhile, motorsport, the Rugby League World Cup and T20 World Cup Cricket are bolstering subscriber loyalty as we near the spring selling season.”
News Corp CFO Susan Panuccio added: “In Subscription Video Services, revenues for the quarter were US$502 million, down approximately 2% compared to the prior year on a reported basis due to foreign currency headwinds. Importantly, on an adjusted basis, revenues rose 6% versus the prior year, accelerating from the prior quarter rate of 4% growth.
“Streaming revenues accounted for 25% of circulation and subscription revenues, versus 19% in the prior year and again more than offset broadcast revenue declines.
“Total closing paid subscribers across the Foxtel Group reached almost 4.5 million at quarter end, up 16% year‐over‐year, with the growth rate improving 3 percentage points from the fourth quarter. Total subscribers, including trialists, reached over 4.6 million.
“Total paid streaming subscribers reached over 2.8 million, increasing 34% versus the prior year and adding 117,000 sequentially, with streaming subscribers now representing 63% of Foxtel’s total paid subscriber base.
“Kayo paying subscribers reached almost 1.3 million, up nearly 19% year‐over‐year, slightly down from the fourth quarter levels due to typical seasonal patterns with the end of the AFL and NRL seasons in September.
“Binge paying subscribers grew a robust 67% year‐over‐year to over 1.3 million subscribers,benefiting from the release of the House of the Dragon and the popularity of the Foxtel original series, The Twelve.
“Foxtel ended the quarter with over 1.4 million residential broadcast subscribers, down 10% yearover‐year, similar to the fourth quarter rate. Broadcast churn was 14.2% compared to 14% in the prior year, partly reflecting the acceleration of migrating subscribers off cable. Broadcast ARPU rose over 1% to approximately A$83.
“Segment EBITDA in the quarter of US$111 million fell 3% versus the prior year, significantly impacted by currency with Adjusted Segment EBITDA increasing 5%.”
On Outlook, Ms Panuccio said: “In Subscription Video Services, we remain pleased with the performance of the streaming products and the ongoing focus on Broadcast ARPU and churn as we continue to migrate customers from cable to streaming.”
Data and quotes are sourced from News Corp’s First Quarter Fiscal 2023 Earnings Announcement and Investor Briefing of November 8, 2022 (New York). Full details can be found at https://investors.newscorp.com
* Adjusted to remove the effect of currency fluctuations. News Corp calculates the impact of foreign currency fluctuations for businesses reporting in currencies other than the US dollar by multiplying the results for each quarter in the current period by the difference between the average exchange rate for that quarter and the average exchange rate in effect during the corresponding quarter of the prior year and totalling the impact for all quarters in the current period.