News Corp recently released its Fiscal 2023 Third Quarter Earnings (Q3 FY23) for the period ending 31st of March 2023, including subscriber highlights for the Foxtel Group and financial results for the Subscription Video Services segment.
Commenting on the Foxtel Group at News Corp’s Q3 FY23 Investor Briefing this morning, News Corp Chief Executive Robert Thomson said: “In Australia, Foxtel Group continues to build on its streaming success. Streaming now accounts for two-thirds of the total Foxtel subscription base and that revenue growth is more than offsetting the decline in broadcast – fears that our world-class streaming products would be a catalyst for cannibalisation have been unfounded.”
Speaking at the Q3 FY23 Investor Briefing, Mr Thomson said: “Broadcast churn is at near record-low levels with Foxtel retail churn in March under 10 percent. That success is also a tribute to our marketing and customer service teams at Foxtel, and to the leadership of Patrick Delany and Siobhan McKenna.
“As at the end of March, BINGE, our entertainment streaming product, launched advertising on its basic service, adding a new, lucrative revenue stream. Interest from advertisers has been ardent as the initial phase of packages were sold out. We have demand and, seemingly, some flexibility on pricing in the months and years ahead.”
News Corp CFO Susan Panuccio added: “On a constant currency basis, revenues rose 2 percent versus the prior year, the fifth consecutive quarter of growth in constant currency.
“Streaming revenues accounted for 26 percent of circulation and subscription revenues, compared to 20 percent in the prior year and again more than offset broadcast revenue declines, benefiting from both volume growth and higher pricing at Kayo Sports and BINGE.
“Total closing paid subscribers across the Foxtel Group improved to nearly 4.6 million at quarter end, up 6 percent year-over-year. Total paid streaming subscribers were approximately 3 million, increasing 16 percent versus the prior year and accounted for approximately 65 percent of Foxtel’s total paid subscriber base.
“Paid subscribers for Kayo Sports reached a record of over 1.3 million, up 14 percent year-over-year. Net adds from the prior quarter improved to 183,000, the largest sequential increase in seven quarters, with the start of the popular Winter sports codes in March. Revenues also benefited from a price rise implemented in February.
“BINGE paid subscribers grew 22 percent year-over-year, or 109,000 net adds from the last quarter, to nearly 1.5 million subscribers, benefiting from the successful release of The Last of Us.
“As Robert mentioned, on March 30th, Foxtel introduced advertising within the BINGE Basic product. The product accounts for approximately 30 percent of all BINGE subscribers. We expect a modest revenue contribution from advertising beginning in the fourth quarter.
“Foxtel ended the quarter with over 1.3 million residential broadcast subscribers. Broadcast churn continued to improve, down 200 basis points year-over-year to 12.3 percent. In fact, Foxtel retail churn was just under 10 percent for March 2023. Broadcast ARPU rose 2 percent to over A$84.
“Adjusted Segment EBITDA declined 9 percent reflecting higher sports costs due to contractual escalators and enhancements.”
On Outlook, Ms Panuccio said: “In Subscription Video Services, we continue to expect the Foxtel Group’s profitability in local currency for the full year to be relatively stable to the prior year despite a step up in sports rights costs in the second half related to annual contractual escalators.”