News Corp’s push into subscription video services is costing the media giant millions, according to financial results.
Subscription video services revenue for the three months ended December 31 fell from $US562 million in 2018 to $501 million in 2019, marking an 11 per cent drop.
News Corp points out $US25 million of this decrease can be blamed on foreign currency fluctuations.
“The remainder of the revenue decline was driven by the impact from lower broadcast subscribers and changes in the subscriber package mix, partially offset by higher revenues from Foxtel’s OTT products, Kayo, which launched in November 2018, and Foxtel Now,” the company said.
In Australia, Foxtel subscribers grew three per cent from the previous year to reach 2.952 million.
This growth was primarily driven by growth in Kayo subscribers, which reached 372,000 subscribers (350,000 paying) as of 31 December.
As of 5 February, there are 370,000 paying Kayo subscribers, said News Corp.
However, this is still a decrease of around 32,000 from November 2019, when Kayo revealed there were 402,000 subscribers as part of its one-year celebrations.
Segment earnings before interest, tax, depreciation, and amortisation (EBITDA) for News Corp’s subscription video services decreased $US14 million from the previous year.
News Corp did suggest it has managed to offset some of the revenue loss by lowering programming and transmission costs.
