News Corp's second quarter profit is down 20% to $280 million year-on-year on the back of declining print advertising and e-book sales, with cost-cutting at newspapers set to continue.
All business lines except digital real estate services reported loses in accounts based on US accounting rules.
When adjusting for the impact of acquisitions, litigation and foreign currency fluctuations, News Corp's profit declined by 17% to $317 million.
Locally, strong Foxtel subscription numbers, which closed at 2.9 million subscribers at the end of 2015, helped Foxtel get a 5% revenue increase in local currency terms. Subscriber churn also improved to 10.3% from 11.8%.
Despite this, Foxtel's profit declined 7% year-on-year due to increases in programming costs, the launch of Triple Play and investment in SVOD player Presto.
News Corp's newspaper business reported a 4% decline in revenue to $1.47 billion and 22% drop in profit to $169 million, in local currency terms.
This was largely due to weak print advertising and lower revenues at News America Marketing. A pick up in digital advertising – particularly Dow Jones – growth in paid subscriptions and higher subscription prices helped to offset declines in print circulation and subscription revenue.
News Corp chief executive Robert Thomson says the business is evolving more into digital with a diverse product range, such as the successful digital real estate business realtor.com.
“In our news and information services segment, print advertising remained challenged, but we are seeing growth in digital advertising and circulation revenues,” he adds.
“We are particularly focused on cost reductions and sharing services around News Corp to streamline operations at the newspapers in Australia and the UK.”
What this means for Murdoch's tabloids remains to be seen, but further job cuts are a possibility.
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