Foxtel News

Australian broadcasting news

News Corp profits rise, Foxtel sheds customers - Feb 8, 2024

Advertising revenues and economic pressures bit News Corp Australia and Foxtel Group in the second quarter despite a rise in global revenues and profits driven by its Dow Jones and Real Estate Australia businesses.

The company revealed on Thursday that revenues at the Murdoch family-controlled business rose by 3 per cent to $US2.59 billion ($3.97 billion).

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 16 per cent to $US473 million due to higher revenues, lower costs in its book publishing business and a 5 per cent reduction in the company’s headcount.

Foxtel’s total paying subscribers fell by 6 per cent across the quarter to 4.32 million ahead of the launch of its new streaming aggregation product Hubbl later this month. Compared to the same time last year, subscriber numbers were flat. Across a single quarter, it is Foxtel’s largest drop in paying customers since introducing its streaming services.

Almost 250,000 Kayo customers cancelled or paused subscriptions across the quarter, which it put down to a “more difficult summer sports season” alongside inflationary pressures, with traffic on its news titles also down, due to what company chief executive Robert Thomson called “algorithmic aberrations” across major platforms – a trend experienced by most news websites.

Total paying Kayo subscribers as of December 31 were 1.17 million, compared to 1.4 million in the September quarter. Paying Binge subscribers rose marginally to 1.47 million, alongside another dip in Foxtel broadcast customers, which follows previous trends.

Thomson said crucial content negotiations are under way with artificial intelligence providers, while renegotiations for content deals with digital platforms at “advanced stages”. “We are not naive on possible impacts of AI on journalism,” he said.

While Thomson was confident about the prospects of “wooing, not suing” companies such as OpenAI, which is facing litigation from The New York Times, he asserted that those repurposing News Corp content without approval are stealing and “undermining creativity”.

Revenues for the segment were up by 2 per cent, with Foxtel Group revenues of $US470 million for the quarter now representing 29 per cent of total circulation and subscription revenues for the company.

Segment EBITDA for the quarter decreased by $US13 million – or 14 per cent – compared with the year prior, which it said was due to higher sports broadcasting costs, particularly for the AFL and NRL, alongside $10 million in costs relating to the launch of Hubbl.

In an address to investors, Thomson said the company’s “e-revolution” was advancing in tough conditions, with digital subscriptions accounting for 52 per cent of total revenues.

He also paid tribute to News Corp’s “three core pillars” – Dow Jones, book publishing and digital real estate services for the quarter of growth.

Following a drop in the first quarter for the year, News Corp’s Australian mastheads, which include The Australian, The Daily Telegraph and the Herald Sun, added 3000 paying subscribers, growing to 940,000. Segment EBITDA was down 12 per cent compared to the year prior.

Revenues at News Corp Australia again decreased, by 6 per cent across the quarter due to lower advertising revenues. Revenues across the quarter for the news media division were down $US16 million, with total increases in subscription revenue not enough to offset total losses through advertising revenue.

Real Estate Australia helped the company’s digital real estate division grow profits by 15 per cent to $US147 million, with listings in Melbourne (24 per cent) and Sydney (22 per cent) both up significantly.

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Foxtel boss braces for ‘bumpy summer’ of sport without India, Poms - December 3, 2023

Foxtel boss Patrick Delany has conceded that this summer of sport will be “a bit bumpy” for the pay TV company, as lower audiences are expected for the cricket series against Pakistan and West Indies compared with drawcards such as India and England.

Foxtel, which is majority-owned by News Corp, reported just 2000 new paying subscribers to its sports platform Kayo at the end of September, compared with the previous quarter. Its total paying subscribers on Kayo, Binge and its pay-TV business fell by 77,000 to 4.58 million. Mr Delany said the next quarter would be tougher.

The challenging summer comes as Foxtel looks to introduce artificial intelligence-generated price options for customers, known as “dynamic pricing”. This tailors offers to new or existing subscribers based on a user’s viewing habits.

“The sports business is interesting because rotational churn has that seasonality to it. It depends on what sports and what’s trending at the time,” Mr Delany told the Media Partners Asia APOS summit in late September, in previously unpublished comments.

“In the sports area, it’s going to be a bit bumpy this summer. We don’t have the big teams out, we don’t have India and the Poms out ... there’ll be a bit of a churn hiccup in the next quarter.”

The major summer sports for Australian broadcasters are cricket and the Australian Open tennis. The ICC Men’s World Cup, for example, drew record audiences on Foxtel for the event – an average of 223,000, and 494,000 people for the grand final between Australia and India. There were 2.5 million streams on Kayo to see Travis Head guide Australia to victory.

Cricket involving India and England typically draws the biggest live crowds and TV audiences. This year, the Australian men’s cricket team plays the West Indies and then Pakistan starting on December 14; the women’s team will play South Africa from late January.

In its latest corporate filings, Foxtel reported its content costs jumped by $114 million to $1.5 billion for the 12 months to June 30. In the next couple of years, however, there will be even bigger obligations under new sports rights contracts.

Foxtel has tied up Australian cricket and AFL until 2031. Its new cricket deal will cost it almost $140 million a year and begins from the 2024-25 season until 2030-31. Late last year, Foxtel and Seven signed a $4.5 billion broadcast deal with the AFL.

At the global media event, Mr Delany said the company had learnt “extreme cost discipline”. “We’ve got pretty good at that,” he said. Foxtel cut more than 250 staff over the past year, reporting a workforce of 1558 at the end of the 2023 financial year compared with more than 1800 the year before.

It would also continue to leverage its 1.5 million residential and commercial set-top box customers for as long as it can, “squeezing” them for revenue.

“We haven’t been running it for subscribers numbers for a long time,” Mr Delany said. “It, by and large, is older Australians that are wealthy… we’ll continue to squeeze as much revenue out as possible.”

The company recently unveiled Hubbl, its new puck product that will bundle multiple streaming services into a single bill. Mr Delany has become chief executive of both Foxtel Group and Hubbl.

News Corp global chief financial officer, Susan Pannuccio, told analysts last month that Foxtel expected “modestly higher expenses” for the 2024 financial year driven by sports rights and costs associated with launching Hubbl.

It will create offers for customers depending on their propensity to pay. “We’ll introduce dynamic pricing using AI into the winter of next season, which should go well,” he told the global media summit.

The company has been hiring pricing, yield and AI specialists to “optimise performance of 1:1 personalised dynamic pricing”.

Foxtel lands international cricket extension as boss pours cold water on Amazon deal
- December 8, 2023

Foxtel boss Patrick Delany has played down the impact of Amazon’s ICC broadcasting rights deal as his company announced its own multiyear contract extensions with the South African, English and Indian cricket boards.

Amazon shook up the world of cricket broadcasting earlier this week with a blockbuster deal to show the next four years of World Cup, World Test Championship final and Champions Trophy action behind a paywall on its Prime Video service, but Delany said it was not the shift in broadcasting market dynamics it had been made out to be.

“I don’t think Amazon buying some ICC games, which are largely World Cups that are played offshore, is some sort of big change in the market,” Delany said.

“There is not a lot of content that’s relevant to Australia in terms of time zone, time of the year and countries that it’s being played in,” Delany said about the next two World Cup cycles, adding Australia’s recent triumph in India aired at suitable times for local fans.

Foxtel announced its extensions on Friday, under which all international Test, One Day International and T20 cricket tours played across South Africa, England and India – barring the Ashes – will be broadcast across Foxtel and its streaming service, Kayo, extending a decade-long partnership.

The Ashes are excluded due to its status on the federal anti-siphoning list, which protects certain events with major cultural significance from being taken behind a paywall. Nine, the owner of this masthead, recently secured a deal to broadcast the next two Ashes tours in England in 2027 and 2031.

Foxtel, alongside the Seven Network, will broadcast series held on Australian soil until 2031 in a deal extended earlier this year.

At the end of November, the Albanese government introduced legislation into Parliament updating the anti-siphoning list to include online services. Under the legislation, free-to-air broadcasters are given priority to secure the broadcast rights to show events on the list.

The content included in Amazon’s rights deal with the ICC is not included on the list, which protects World Cup matches involving Australia, but only if they are played in either Australia or New Zealand.

The next World Cup, where Australia will attempt to defend its recent win, will be jointly hosted by Namibia, Zimbabwe and South Africa in 2027. Australia and New Zealand will host the T20 World Cup in 2028, which is not included in Amazon’s deal.

“It didn’t go our way,” Delany says on the proposed updates to the anit-siphoning legislation. “We think free is free, and if an operator is willing to provide Australian iconic sport to Australians for free, and the internet can do that, then we think that should have been enough.

“We were disappointed that we didn’t move into the 21st century with it.”

Rebecca McCloy, Foxtel Group’s executive director of commercial sport, said the deal bolsters Foxtel’s offering for cricket fans for years to come.

“Alongside our comprehensive rights to domestic cricket, which we have until 2031, this announcement is great news for our millions of subscribers who can continue to enjoy the most extensive coverage of cricket in Australia and around the world.”

Foxtel also broadcasts all New Zealand cricket matches, the Indian Premier League and men’s and women’s Big Bash League matches.

Foxtel channels revamp - October 2023

New logos and name changes come ahead of streaming aggregation platform.

Foxtel has refreshed a number of channel names, including dropping the “FOX” branding from numerous.

FOX Arena, and FOX Showcase are now reverting back to the original Arena and Showcase channel names, while there are changes also for Comedy, Docos, SciFi, Comedy, Classics, mystery channels etc.

FOX One will transform Foxtel One.

FOX8 remains but with a revamped logo.

The changes come ahead of the previously reported streaming aggregation platform based on Sky Glass -known in-house as Project Magneto.

A Foxtel spokesperson said, “As our business evolves, and as we leverage brands in new ways, we have refreshed some of our channel names to reflect this. There will be no impact to customers who will continue to enjoy all the great content and channels they are familiar with and love.”

The mini-deal that shows the Foxtel CEO is on a winning streak - 23rd July 2023

Foxtel chief executive Patrick Delany can exhale a little. The pay TV company struck a deal last week with ESPN to continue as the local go-to broadcaster for top sport played in the United States.

Foxtel announced the deal on Wednesday morning with little fanfare and scant detail – issuing a press release which said the distribution deal was a “new multi-year” agreement to keep broadcasting the NBA, NFL, MLB, NHL and UFC in Australia. The release also carried a statement from Kylie Watson Wheeler, the local head of Disney, the parent company of ESPN.

When asked about the length of the deal, Foxtel said that even disclosing how many years it involved was commercial-in-confidence. But industry sources suggest the agreement was for about two years.

That’s a mini coup because the value proposition of Kayo – Foxtel’s sports streamer – hinges on having all key sport under one roof. The company signed a long-term deal with the AFL last year and now with the US sport, the NRL will be up next. As part of the announcement, Foxtel said Kayo now had 1.3 million subscribers.

Delany was able to secure a deal with Warner Bros Discovery-owned HBO earlier this year, which made sure Binge remains the home of Succession, White Lotus and Game of Thrones spin-off House of the Dragon – for now.

Foxtel’s executives are on a streak, nailing down the most valuable content they licence, surely pleasing potential investors if they ever get around to the often-rumoured – and long-delayed – plans to list on the ASX.

But apart from the mammoth AFL deal, these agreements are hardly stable planks on the Foxtel ship. An agreement of about two years will give the company some breathing room. There have been fears among Aussie execs for years that the US media giants such as Disney and Warner Bros Discovery want to enter the Australian market with their own services, such as an ESPN-only streamer or HBO Max.

One reason the ESPN deal may have been detail-lite is because things are clearly shifting at Disney. In the past few weeks, Disney CEO Bob Iger has effectively put parts of the Magic Kingdom up for sale.

Iger set a cat among the pigeons at the annual Sun Valley conference, telling CNBC that he was reviewing parts of the business that were no longer “core” to Disney. That was largely seen as a concession that the veteran executive was looking to sell ABC, the legacy linear TV business. The Wall Street Journal also reported that Iger was looking at its options for ESPN, which may involve a “strategic partner” – potentially from a sports league.

(AFR)

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