News takes a tumble for News Corp, but Foxtel push works

James McGrath
By James McGrath | 6 May 2015

News Corp has taken a tumble on its news revenue, but there was a bright spot in its results as Foxtel's new pricing succeeded in driving new customers, if not revenue.

Releasing its results in New York, the media giant said its overall revenue for the third quarter of the financial year had reached $US2.06 billion ($A2.6 billion), a 1% decline on the previous corresponding period.

News Corp blamed the drop on currency fluctuations and lower advertising revenue. Overall, the group reported revenue from advertising of $904 million, down from $952 million in the previous corresponding period.

Elsewhere, it said that heavy marketing and pricing changes had managed to grow Foxtel's subscriber base to 2.8 million subscriptions, or an uplift of 7% on the previous corresponding period.

But its revenues dropped by $66 million to $620 million.

Earnings were also down by $61 million to $224 million as a result of heavy investment in marketing, content, and subscription video on demand platform Presto.

In November of last year Foxtel unveiled a new pricing structure for its subscribers, and has subsequently unveiled a triple play offering.

It also reported a drop in circulation revenue, down to $650 million from $665 million.

The drop in advertising and circulation revenue equated to a 9% drop in revenue for its news segment, down to $1.35 billion.

Its news earnings however dropped by 23%.

Interestingly, it said its news earnings were hit by a $8 million hike in legal expenses in the US, offset by lower overall costs in Australia.

News Corp's investment in real estate services however continues to come up a winner for News Corp, with a revenue uplift of 67% year on year, although this was impacted by the acquisitions of Move, Inc.

* An earlier version of this story stated that Foxtel had grown to 2.8 million people, rather than subscriptions. The story has been changed to reflect this.

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