Foxtel revenue is falling but subscriptions surge through its new streaming services

By Chris Pash | 9 August 2019

Foxtel's revenue is shrinking but its subscriber base is growing quickly through its streaming services Kayo and Foxtel Now while its traditional broadcast service numbers fall.

Owner News Corp says Foxtel had 3.144 million subscribers at the end of June, up 12% on last year, primarily due to the launch of Kayo and growth at Foxtel Now.

The company reported Subscription Video Services revenue of $US536 million for the quarter, down 12% on last year. For the year it was $US2.202 billion, about double the 2018 result because of the integration of Foxtel and Fox SPORTS to create a new company. 

Paying subscribers for the Kayo sports streaming service more than doubled between the third and fourth quarters to 331,000.

But the traditional service is still important. About 2.4 million of the total closing subscribers were broadcast and commercial subscribers,m with the rest Foxtel Now and Kayo subscribers.

"Kayo is adding significantly to the total number of sports viewers in Australia prepared to pay for premium content," says News Corp in its latest quarterly earnings report.

Foxtel last month announced a deal with Netflix to integrate the streaming platform into its set-top box technology.

Following its launch in November 2018, Kayo grew over eight months to reach 382,000 subscribers, of which around 331,000 were paying.

Foxtel Now totaled 460,000 subscribers as of June 30, of which 446,000 were paying subscribers, up 32%.

Broadcast subscriber churn in the quarter was 14.7% compared to 12.5%, reflecting a price increase.

Average revenue per customer fell 1% to more than $A78 ($US55).

EBITDA in the June quarter fell $12 million, or 12%, mainly due to lower revenues, $20 million of higher sports programming costs, primarily related to Cricket Australia, higher marketing costs related to Kayo and the $8 million negative impact from foreign currency fluctuations.

News Corp June quarter total revenue was $US2.47 billion, an 8% fall compared to the same three months last year.

Among the reasons for the fall were lower broadcast subscriber revenues at the Subscription Video Services segment and lower advertising revenues from the company's newspapers. 

For the full year to June, revenues was $US10.07 billion, a 12% increase. Net income was $US228 million compared to a net loss of $US1.44 billion last year. 

News Corp's segment results:

news corp q4 2019

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