Murdoch’s News Corp eyes AI opportunities, revenue slides
By Calum Jaspan
The local arm of Rupert Murdoch’s News Corporation has reported a revenue slide on the back of more advertising woes, while global chief executive Robert Thomson signalled further investment in artificial intelligence for cost-saving opportunities.
The media giant reported its full-year results on Friday morning after the closing bell on Wall Street, with News Corp Australia’s fourth-quarter revenue falling by 15 per cent. The company said the drop was affected by lower print and digital advertising.
News Corp global chief executive Robert Thomson said the company was optimistic about the year ahead.Credit: AP
Revenue for the Australian division, which houses titles including The Australian, The Daily Telegraph and the Herald Sun, was also down 8 per cent across the fiscal year.
Thomson said the fiscal year results highlighted the durability of the company as it battled challenging macro conditions, supply chain pressures and currency headwinds.
He noted digital accounting for more than half of revenue 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 an audience at the WAN IFA World News Media Congress in Taipei recently 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.
The figures were affected by the absence of an additional week in the prior year and negative foreign currency fluctuations, News Corp said.
News Corp Australia added 16,000 digital subscribers in the final quarter of fiscal 2023, taking its total count to 1,059,000.
The US-listed media group – which owns News Corp Australia, Foxtel Group, mastheads in the United States and Britain, book publishers and real estate advertising assets – said global revenue for the year to June 30 was $US9.9 billion ($15.1 billion), a 5 per cent decrease on the previous year.
Earnings before interest, taxes, depreciation and amortisation in the news media segment fell 28 per cent to $US156 million, with its book publishing division, which includes HarperCollins, diving 45 per cent to $US167 million thanks to a fall in book sales.
For the fourth quarter, overall revenue slid 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.
Despite the dip in revenue, E&P Capital analyst Entcho Raykovski called it a “good result”, which outperformed estimates.
“At an EBITDA level, the beat to our estimates was driven by better performance from Dow Jones, News Media and lower corporate costs. This is a good result, and we’d expect the stock to outperform the market today.”
Thomson paid tribute to the “remarkable turnaround” by its Foxtel Group business in Australia, noting growth in the fourth quarter and full year on an adjusted basis.
Fourth quarter revenue for Foxtel was down 4 per cent year-on-year at $501 million, with increased revenue from streaming applications Binge and Kayo partially offsetting the impact of fewer residential broadcaster subscribers.
Michael Miller is chairman of News Corp Australia, which has pushed ahead with AI in its newsrooms.Credit: Rhett Wyman / SMH
Total paying Kayo subscribers lifted to 1.4 million, while Binge subscribers remained flat across the past quarter. Broadcast subscribers continued to fall across the past year, down at 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¢ a share, fully franked.
REA Group chief executive Owen Wilson said the year-on-year performance was reflected through a strong listings environment in 2022.
“Despite the significantly lower listings in financial year 2023, 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.”
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