News Corp Australia mastheads reach one million digital subscribers

News Corp Australia has reached one million digital subscribers, a milestone revealed as News Corp reported steady first-quarter revenue.

News Corp chief executive Robert Thomson said the media giant was showing strong resilience in the face of tough economic conditions.

News Corp Australia now has more than one million digital subscribers.

The milestone was revealed as News Corp reported steady revenue for the first quarter of the 2023 financial year, in New York on Wednesday morning.

As of September 30, 2022, NCA had 1,012,000 digital subscribers, an increase of 13 per cent year-on-year.

News Corp Australasia’s executive chairman Michael Miller said the achievement vindicated the company’s decision to introduce paid subscriptions in 2011, a move which was met with much scepticism across the media industry at the time.

“The naysayers claimed people would never pay in sufficient numbers to make digital publishing a viable subscription business, however they failed to appreciate how digital and data would bring us so much closer to our audiences through new, innovative storytelling channels,” he said.

News Corp Australia has reached more than one million digital subscribers.

“Over the past 11 years since introducing paid digital subscriptions almost all major publishers globally have developed similar successful models but very few have matched either our penetration or volume.”

Mr Miller said breaking through the “one-million barrier” was a significant milestone in News Corp’s history.

“There are 26 million Australians and more than a million now subscribe to the company’s digital mastheads,” he said.

“It shows people are willing to pay for a quality product.

“We’re focused on content and curation, tone and relevance. And the model is clearly succeeding.”

Reporting the financial results for both the first quarter of fiscal year 2023, News Corp chief executive Robert Thomson said the media giant was showing strong resilience in the face of tough economic conditions.

“While the macro environment is patently more volatile, the results highlight the resilience of News Corp and the potential for sustained growth and increased profitability,” Mr Thomson said.

Revenues in the quarter were $US2.48bn, a 1 per cent decrease compared to $US2.5bn in the prior year, weighed by a $US153m negative impact from foreign currency fluctuations, and lower book publishing segment revenues.

“On an adjusted basis, our revenues grew a healthy 3 per cent, building on the robust results from last year,” Mr Thomson said.

“Profitability for the quarter was $350m, down 15 per cent, although that reflects the forex headwinds and a reset by Amazon of its book inventory levels and warehouse footprint.

“We view neither factor as reflective of core business conditions or of our long-term potential.”

Amazon closed or cancelled dozens of its warehouses across the US in the first quarter, which affected order volumes in News Corp’s book publishing division.

Analysts noted the impact of the Amazon closures, but did not view it as a long-term problem.

“Looking forward, the impact of recent negative forex movements appears to be somewhat priced in, and while the impact of the Amazon closures may be felt in the second quarter, (they) are not ongoing,” UBS analysts said in a note.

Mr Thomson also observed the strong performance of Australian streaming-led sports and entertainment service Foxtel, and the growth in the number of streaming subscribers across leading platforms Kayo (sports) and BINGE (entertainment).

As of September 30 this year, Kayo had 1.259m paid subscribers, up 19 per cent year-on-year, while BINGE had reached 1.342m paid subscribers, a jump of 67 per cent on the previous year.

Total Foxtel Group paid subscribers increased to 4.465 million, up 16 per cent on the same time in 2021.

“Streaming subscriber penetration continues to expand, and costs have been thoughtfully controlled,” Mr Thomson said.

“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.

Dow Jones posted its best first-quarter results since its acquisition, with revenue rising 16 per cent and segment EBITDA up 19 per cent.

“News Corp is building on a sturdy base. We have reported record profitability in each of the last two fiscal years and bolstered our fortunes through savvy investments and by streamlining the cost base,” Mr Thomson said.