News Corp today released its Fiscal 2023 Third Quarter Earnings (Q3 FY23) for the period ending 31 March 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 Q3 FY23 Investor Briefing this morning, News Corp Chief Executive Robert Thomson said: “In Australia, Foxtel Group continues to build on its streaming success. Streaming now accounts for two-thirds of the total Foxtel subscription base and that revenue growth is more than offsetting the decline in broadcast – fears that our world-class streaming products would be a catalyst for cannibalisation have been unfounded.”
Subscription Video Services Segment Highlights
- Adjusted (1) Q3 Revenues for the Subscription Video Services segment grew 2% year-on-year
- Adjusted Q3 Segment EBITDA decreased 9% year-on-year
Key Foxtel Group Subscriber Metrics
- Total Foxtel Group subscribers of 4.662 million (4.585 million paid), up 3% on the prior corresponding period
- Total streaming subscribers, including Kayo Sports, BINGE and Foxtel Now reached 3.039 million (2.963 million paid), up 11% year-on-year
- Streaming subscribers represented approximately 66% of the Foxtel Group’s total subscribers (61% in Q3 FY22)
- Kayo Sports reached 1.332 million subscribers (1.309 million paid), up 10%
- BINGE reached 1.529 million subscribers (1.484 million paid), up 17%
- Foxtel Now reached 178,000 subscribers (171,000 paid), down 17%
- Foxtel residential and commercial broadcast subscribers were 1.602 million, down 9%
- Foxtel Residential subscribers declined to 1.369 million
- Broadcast ARPU rose 2% to A$84 (for the three months ended 31 March 2023, year-on-year), through a continued focus on Foxtel’s premium brand positioning
- Residential churn improved sequentially and year-on-year to 12.3%
Speaking at the Q3 FY23 Investor Briefing, Mr Thomson said: “Broadcast churn is at near record-low levels with Foxtel retail churn in March under 10%. That success is also a tribute to our marketing and customer service teams at Foxtel, and to the leadership of Patrick Delany and Siobhan McKenna.
“As at the end of March, BINGE, our entertainment streaming product, launched advertising on its basic service, adding a new, lucrative revenue stream. Interest from advertisers has been ardent as the initial phase of packages were sold out. We have demand and, seemingly, some flexibility on pricing in the months and years ahead.”
News Corp CFO Susan Panuccio added: “On a constant currency basis, revenues rose 2% versus the prior year, the fifth consecutive quarter of growth in constant currency.
“Streaming revenues accounted for 26% of circulation and subscription revenues, compared to 20% in the prior year and again more than offset broadcast revenue declines, benefiting from both volume growth and higher pricing at Kayo Sports and BINGE.
“Total closing paid subscribers across the Foxtel Group improved to nearly 4.6 million at quarter end, up 6% year-over-year. Total paid streaming subscribers were approximately 3 million, increasing 16% versus the prior year and accounted for approximately 65% of Foxtel’stotal paid subscriber base.
“Paid subscribers for Kayo Sports reached a record of over 1.3 million, up 14% year-over-year. Net adds from the prior quarter improved to 183,000, the largest sequential increase in seven quarters, with the start of the popular Winter sports codes in March. Revenues also benefited from a price rise implemented in February.
“BINGE paid subscribers grew 22% year-over-year, or 109,000 net adds from the last quarter, to nearly 1.5 million subscribers, benefiting from the successful release of The Last of Us.
“As Robert mentioned, on March 30th, Foxtel introduced advertising within the BINGE Basic product. The product accounts for approximately 30% of all BINGE subscribers. We expect a modest revenue contribution from advertising beginning in the fourth quarter.
“Foxtel ended the quarter with over 1.3 million residential broadcast subscribers. Broadcast churn continued to improve, down 200 basis points year-over-year to 12.3%. In fact, Foxtel retail churn was just under 10% for March 2023. Broadcast ARPU rose 2% to over A$84.
“Adjusted Segment EBITDA declined 9% reflecting higher sports costs due to contractual escalators and enhancements.”
On Outlook, Ms Panuccio said: “In Subscription Video Services, we continue to expect the Foxtel Group’s profitability in local currency for the full year to be relatively stable to the prior year despite a step up in sports rights costs in the second half related to annual contractual escalators.”
Data and quotes are sourced from News Corp’s Q3 FY23 Earnings Announcement and Investor Briefing of 11 May 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.