News Corp today released its Fiscal 2023 (FY23) Fourth Quarter (Q4) and Full Year Earnings for the 12 months ended 30 June 2023, 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 FY23 Q4 and Full Year Earnings Investor Briefing this morning, News Corp Chief Executive Robert Thomson said: “Subscription Video Services revenues increased from 6 percent of News Corp’s total to 20 percent, bolstered by the consolidation and control of Foxtel, a business renewed. And Foxtel’s imminent completion of a refinancing is expected to facilitate repayments of our outstanding shareholder loans beginning this fiscal year.”Subscription Video Services Segment Highlights
- Adjusted (1) Full Year Revenues for the Subscription Video Services segment grew 4% year-on-year, the sixth consecutive quarter of growth in constant currency
- Adjusted Full Year Segment EBITDA increased 4% year-on-year
Key Foxtel Group Subscriber Metrics
- Total Foxtel Group subscribers of 4.723 million (4.650 million paid), up 4% on the prior corresponding period
- Total streaming subscribers, including Kayo Sports, BINGE and Foxtel Now reached 3.129 million (3.058 million paid), up 13% year-on-year
- Streaming subscribers represented approximately 66% of the Foxtel Group’s total subscriber (62% in Q4 FY22)
- Kayo Sports reached 1.411 million subscribers (1.401 million paid), up 8%
- BINGE reached 1.541 million subscribers (1.487 million paid), up 22%
- Foxtel Now reached 177,000 subscribers (170,000 paid), down 12%
- Foxtel residential and commercial broadcast subscribers were 1.574 million, down 9%
- Foxtel Residential subscribers declined 9% to 1.341 million
- Broadcast ARPU rose 2% to A$84 (for the fiscal year ended 30 June 2023, year-on-year), through a continued focus on Foxtel’s premium brand positioning
- Residential churn improved year-on-year to 12.7%, down from 13.8%
Speaking at the FY23 Q4 and Full Year Earnings Investor Briefing, Mr Thomson said: “Subscription Video Services reported adjusted revenue and profit growth, which excludes currency impact, for the second straight year and also for the fourth quarter – a remarkable turnaround from the recent past. We have long-term rights to the key Australian sports and the prime international sports for Australians and have created a model that streamers around the world are now trying to emulate.
“Our streaming revenue growth again outpaced broadcast declines in both Q4 and the full year, with paid subscribers scaling at a double-digit rate – to nearly 3.1 million – so we are particularly confident about Foxtel’s future and our optionality, given the imminent completion of our refinancing. We were asked frequently in the past how much more capital we would need to commit to Foxtel, but the question now is how much cash we will receive in coming years.”
News Corp CFO Susan Panuccio added: “Revenues for the quarter were $501 million, down 4% compared to the prior year on a reported basis due to foreign currency headwinds. On a constant currency basis, revenues rose 3% versus the prior year, the sixth consecutive quarter of growth in constant currency.
“Streaming revenues accounted for 29% of circulation and subscription revenues, compared to 23% in the prior year. OTT revenue growth again more than offset broadcast revenue declines, benefiting from both increased subscribers and price increases at Kayo and BINGE.
“Total closing paid subscribers across the Foxtel Group improved to over 4.6 million at quarter end, up 5% year-over-year. “Total paid streaming subscribers approached 3.1 million, increasing 14% versus the prior year and accounted for approximately 66% of Foxtel’s total paid subscriber base. “BINGE continued to expand advertising inventory on the Basic product, generating both modest incremental revenues and some upgrade activity to higher tiered subscription offerings.
“Foxtel ended the quarter with over 1.3 million residential broadcast subscribers, down only 9% year-over-year. Broadcast churn continued to improve, down more than 260 basis points year-over-year to 11.1%, the lowest level since fiscal 2016, while Broadcast ARPU rose 2% to over A$84. Foxtel announced a price rise beginning in July across some of the Broadcast tiers, the first since Fiscal 2019, which will benefit the fiscal 2024 results. “Segment EBITDA in the quarter of $78 million was down 4% versus the prior year but was up 4% on an adjusted basis despite higher programming costs, mostly related to contractual escalators across key sports rights. “On the product front, following the successful growth in streaming, the business will be launching a streaming aggregation device leveraging the Sky Glass technology. Expectation is for a commercial launch later in fiscal 2024 – and we will keep you updated on our progress.”
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 complete the migration of customers from cable in the first half. We expect modestly higher expenses for the full year driven by sports rights and product investment, which will be more weighted to the first half. We expect full year capex and profitability will be relatively stable in local currency.”
Data and quotes are sourced from News Corp’s FY23 Q4 and Full Year Earnings Announcement and Investor Briefing of 10 August 2023 (New York). Full details can be found at https://investors.newscorp.com...
1 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.